The Exeter Times-Advocate, 1970-03-26, Page 12DISTRICT FARM UNION LOCAL GETS CHARTER — At a special meeting in Dashwood Wednesday
the South Huron local of the National Farmers Union received its charter. The new executive is shown
above. Back, director Gerald Regier, guest speaker Walter Miller vice-president of NFU and directors Paul
Steckle and Joe Miller. Front, secretary Mrs. Delmar Miller, president John Laporte and vice-president
Lloyd Willert, T-A photo
OFA says capital gain tax
puts burden on farmer
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the farm until death before
passing it to his son.
This should be changed so the
farmer can pass control of the
farm to his son before he dies.
Where a farm is operated by a
closely held corporation — for
instance a father and married
sons — which has more than one
main residence on the property,
$1,000 capital gain allowance
should be allowed each year for
each house.
Capital gains tax should not
be levied on sale of property to
conservation authorities: "This
is admittedly a purely social
consideration, but very
necessary under present
conditions."
The statement says discretion
should not be left in the hand of
a minister of finance as to what
convention and business meeting
expenses should be allowable for
deduction.
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Page 12 Timer.-Advocate, March 26, 1970
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Ontario farmers who do not like to dig into their pockets will be able to belong to the Ontario Federation of Agriculture by a deduction from their receipts for products
hoorga n ization
sold, T
has approved a fOrm authorizing the marketing boards that sell the
farmer's product to deduct the
membership monthly or
annually in perpetuity.
Export sales
for wheat
The inventory of 1969 crop
winter wheat owned by the
Ontario Wheat Producers'
Marketing Board has been
reduced sharply in recent export
sales.
Delegates attending a
provincial wheat meeting of
elected county committeemen
held in Toronto March 18 and
19 were advised that out of a
total of 3 million bushels of
sprouted wheat purchased by
the marketing board since
harvest, 2,960,000 bushels has
been sold leaving 40,000 bushels
on hand.
In addition, 650,000 bushels
of milling quality wheat is
owned by the marketing board
and is being offered for export.
In a report of the purchase
and sales position made by the
board's marketing agent, United
Co-operatives of Ontario and
presented by Mr. H. H. Pitz,
Chatham, the meeting was also
advised it is anticipated some
further small blocks of sprouted
wheat will be purchased but a
clean up of stocks is expected by
crop year end.
Mr. Pitz also expressed doubt
that any further large quantities
of milling quality wheat will be
offered to the board and hope is
held that present stocks will also
be disposed of by year end.
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Since a major shuffle a few
months ago, the organization has
put its faith in memberships sold
directly to the farmer, hoping to
build .a sense of belonging and
loyalty to the organization.
But organization membership
sales have been slower than
planned — 1,888 farmers had
bought memberships up to last
Tuesday — and the organization
wants to save all the trouble of
selling from farm to farm in
future years.
Before the shuffle a few
months ago, part of the
organization's finances came
from county organizations,
which collected their money
from county council grants and
tax levies on farmers.
The provincial group has
calculated that the county
organizations took in between
$2 and $7 per farm under the
old scheme, and remitted $1.37
per farm of the OFA.
The membership payable
under the new checkoff is $25,
with up to $5 being refundable
in some cases to the county
group.
A suggestion to permit the
amount of the checkoff to be
raised without going back to the
member, who signed it was.
rejected at a monthly meeting of
the provincial farm group.
Speakers at the meeting said
it would be like asking farmers
to sign a blank cheque and they
would refuse.
Rabbit owners
have card party
The South Huron Rabbit
Breeders' Association held their
monthly euchre party in
Elimville Hall last Tuesday
evening with a good crowd in
a t t eprii idzaensc e.
were won by: Men's
high, Gord Shaddick; men's lone
hands, David DeForrest; ladies'
high, Myrtle Waghorn who was
also the lucky winner of the
door prize; ladies' lone hands,
Andy Miller (substituting as a
lady); ladies' low, Phyllis Miller;
men's low, Wayne Mulholland.
Lunch was served following
the euchre.
A capital gains tax on top of
estate tax and succession duty
would place too heavy a burden
on the farmer, the Ontario
Federation of Agriculture says in
a statement on the proposals in
the federal white paper on
taxation.
The statement was tabled at
an OFA Monthly meeting last
week in Toronto.
It says so much money would
be taxed from the family farm
that there would be no incentive
to stay in farming; in fact the
farmer would not be able to stay
in the industry.
The organization offers three
proposals:
— Money paid on death
duties be credited as payment on
capital gains tax on the farm;
— Death duties be eliminated;
— Death duties and transfer
costs be deductible as costs to
the owner when calculating the
capital appreciation.
The statement, which will be
debated at an all-day study
conference March 30, says the
impact of a federal capital gains
tax on inflated property values,
on top of federal estate tax and
provincial succession duties
would place an unreasonably
heavy burden on the farmer.
"The impact of these three
on a son inheriting a farm may
be to make him throw up his
hands in disgust."
The statement says other
provinces rebate three-quarters
of the estate tax and levy no
succession duty; Ontario
taxpayers get a rebate of
one-half and pay a succession
duty.
The OFA also complains the
gains tax is a tax on inflation
and calls for an inflation hedge
to be built into the tax system.
If the value of a farm
increases at a rate equal to
inflation, and the farmer is
taxed on the gain, "the tax
system has merely confiscated
(part of) his money, since he had
no real gain," and the statement
calls this "totally unacceptable."
The OFA says both it and the
Canadian Federation of
Agriculture support the
application of an inflation index
based on the shelter component
of the consumer price index.
This is chosen because most
farmers use the proceeds of
selling a farm to buy a house.
Such a calculation would
reduce the gains to terms of real
purchasing power. •
"If the Government is unable
to control inflation, there is no
reason why the taxpayer should
be penalized."
Farmers also should be given
a special allowance of capital
gains to compensate for lack of a
formal pension plan.
Farmers generally re-invests all
surplus in the farm and look
upon the farm as their
retirement fund. "Other
taxpayers who receive a cash
salary or wage have the privilege
of placing some of their salary in
a registered retirement fund on
which they pay no tax until they
withdraw it on retirement.
"Farmers can demand a
similar program whereby the
farmer can designate a part of
his capital gains to be put aside
before tax is deducted for an
annuity program."
Because farmers as small
businesses have difficulty
generating capital, the OFA calls
for 20 percent depreciation on a
straight-line basis and 40 percent
on the declining balance basis
for all depreciable assets.
Many present rates "are
clearly unrelated to good
business practice."
The• . farm group -
clarification is needed on the,
onus of retroactive proof of
valuation of assets.
"The underlying, if
questionable, principle in
taxation disputes is that the
taxpayer is guilty until he proves
himself innocent.
"The taxpayer's value (of
what the asset was worth on
valuation day) should be
accepted and in any dispute the
Government should have to
prove that valuation is correct,
and the Government should pay
75 percent of all costs in the
dispute."
The taxpayer would have the
option of using provincial
market value assessment or
getting a valuation from a
registered appraiser.
Rollover provisions, which
allow a farm to pass from father
to son without a tax on gains,
should be available to farmers
:who sell one farm and use the
money to buy another farm
within 12 months, as long as
their principal occupation is
farming. This would cover both
the farmer whose property was
expropriated and the one who
chose voluntarily to replace his
land.
The statement says the
present proposal for rollovers
would work against good
business practice because they
would force the farmer to hold