HomeMy WebLinkAboutThe Goderich Signal-Star, 1970-02-19, Page 20:MA GOD ICH $t AR T l RSD, ' t 1)1414 9,
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afore: you say you're for �r against
ite Paper, read these facts.
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� on tax reform becomes law, you wvill; a��- as much as 60% 'more income tax than you would . in the United States. In certain crrcum
if the Government White Paperr pay
ii in e United States. You'll find it extremely difficult to start your, own business, retire outside Car ada, or build
.• stances the capital gains tax.will be double the rate the y � �
up a largeeannouant of capital.
These are so of the consequences of the White Paper. Are you happy with them? If not, read the facts in this artle and make your views known . to your Member
some q __ fl
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of Parliament:
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The Government' White Paper on *taxation is an ominous do-
cument. .As it ,,,moves rapidly . towards legislation, only
public protest and' outcry from concerned Canadians . can
stop; it., .. .....
This article ispresented by such a group of concerned Can-
adians. They come from many walks of life. They are op.
posed, not so much from personal points of view (many of
them .would pay less tax under the White Paper), but be-
cause of what it holds for Canada and all Canadians.
No Canadian call quarrel with the White Paper's efforts- to
:ower thew tax burden for people at the low end of the
income scale -or with a tax at a reduced. -rate on realized
capital gains -or with enforcing laws to eliminate tax avoid-
ance schemes and expense account abuses. ' ' •
But. the White Paper goes far beyond these .sensible limits.,
It is a complete tax reform that promises to kil incentives
to- work and save, increase the brain drain 'to the 'more at-
tractive fax climate in the United -States, lead to the with-
drawal oil capital from 'Canada 'and s1oW.down the develop,--,
ment of Or natural resources.
Every Canadian will 'find that the White Paper has some
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Married Home Owner with Two Dependent Children
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Gross •
Income
Ontario State of Ohio Resident Stat. of New York Resident
Resident % lower ¶ lower
Taxes Tax than Cdn. Ta..: $. than Cdn. Tax
$ 8,000.. $ 1,044 $ 416 awe- $ 473
10,000 1,658 690 58% 800
12,000: ° 2.327 1,007 57% . 1,181
15,000 •3.370 ' 1,486. 56% 1,772
20,000' 5,262 • 2.480 53% 3.002
25,000 7.434 3,488 ;53% 4.274
40,000 14,711 , 8.039 45% 9.819
50,000 .. 19,631 ' 11,636 41% 13,948
55%'
52%
49%
47%
43%
43%.
33%
29%
a
If you move to the United States, your. income tax will be
lower by as much as 60%. This favpurable tax position has
been ,aehieed in the ,United States in spite of the incredibly
- nave- 'Gvar_lVetnam: and sending men to the moon.
'The brain drain has long beena7-problem in Canada. The
White Paper- a bi r-prnbleni_Otur_tax_
system must be competitive -particularly with the United
States -if we are to keep our talented people at home. AI
Do you earn less than $9,000 a year?
If you are a married taxpayer whose wife does not work and
if you earn and continue to earn in the future $9,000 a year
or less,.. the White Paper wilt bring you, long -overdue tax
relief. .For example, if you are married with two children
your. tax will drop' by $96 if your income is $6;000 or by
as much as $127 if you earn $4,000. This assumes. that you.'
do not realize taxable gains on the sale of your house or
assets.
HOWEVER, if you are single, or if your wife earns more
than $1,500 your tax will be increased if your -income is
$4,000 or more. If your -.wife earns $4,000 or more, her tax
will be increased too.
Do you earn more than $9,000 a yeah?'
Your taxes will go up, and you will also pay tax on capital
• gains ort the sale of your house and other assets.
Will you be able to resist the attractive tax
climate in the Minitel States?
Mr. Benson •says,r "Canada needs' the- full effort of those
• with outstanding ability", yet his White Paper seems to
, offer more if eentive ,for emigration than effort:
The table -as shown in the next column is a• comparisonis•F
, • Canadian Federal and Provincial tax payable by a resident
of Ontario with the taxes payable by, the average`U`.S. home-
owner with the_ same income. No province imposes a lower
tax than Ontario. The.. comparison includes New York State
income tax (the -highest in tJ.S.) and the State of Ohio (one
of *he lowest)
These figures have been .prepared" by an international firtn
Of Chartered Accountants, on the basis of the recently enact,
ed changes iri"t1S: tax law.
it' E. McKinley:, NO
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Pb Box 4430,
"Ottawa, Orford.
What will you. be worth on "V" Day?
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years. So if your ' investments double in five years you'll
pay tax on that -profit --even if you haven't sold thei<t
Do .you think about leaving Canada for,, business,
health. or retirement reasons?
Mr, Benson doesn't want you- to leave Canada. So he has in-
. troduced a "departure tax". This .means, that if you. leave
Canada, all your assets (house, car,,Investments etc.)'. are
treated as if you had sold them to' make money. You -pay a
tax at full rates on .the increase in value oyer -Valuation
pay.
Do you dream of•going into business far
yourself someday?
'Canada • has always prided itself on being a land. of oppor-
M tunity for Men with ideas and enthusiasm. These .men have
usually started small businesses, and with the help of tax
• incen"tives, - they have blossomed . into many of our large
companies have_contribi4ed a great deal to this coun-
try's -prosperity...
,v White�'aper wilLcbange.alLthat,
- The White Paper proposes a capital gains tax. This means -
that,money you receive from all sources inside and outside
of Canada will be- included in your income and taxable at
your full personal or corporate ^rate. A -deduction will be
• available for capital losses but not in allcircumstances.
On "V" Day Valuation.,Day-you r will, be expected to calcu-
late the current market' value of all your assets worth more
than $500. This includes cars, houses, stocks, cottages, boats,
antiques, paintings, stamp collections and so on. Tile market
value on Valuation Day'will beihe basis for all future capital
gain taxes.... 4 •,
Do you h*, e_ a boat, cottage, antique chair' or
house that you might self someday?
All profit that you snake from Valuation Day to the date of
sale must be added to your incompand is. taxable.
Example: Assume youltaviiThouse that is worth $20,000 on
Valuation Day. Two years Tater you sell it for $30,000. After
deducting' the $1,000 a,'year allowed for appreciation and
$150.00 a year for improvements; you are left with a capital
gain of $7,700 which is taxable. These 'deductions can easily
be eaten up by inflation. If you're in a 40%, tax bracket,
you'll pay $3,080 in tax;:i( you're in a 50%. tax bracket,
you'll pay $3,806 in tax.
However,• if you should sell it for less than $20.000 your loss
is not deductible from income.
Are, you trying°to build your savings by
'melting, in the stock market?-
Your ' rofits, �t�r Valuation Day will be taxable. In fact,
p o
event If you buy shares in widely lied Canadian companies
and don't sell them, you'll stilt pay tax. Mr,A Benson's
White Paper proposes to tax by revaluing shares every five
•
The White Paper will 'make it- difficult` for the small. bust-
atr-to--sure' i-ffiEult for.• -h'
and grow. It may well discourse many bright.. young peo-
ple_with ideas from setting out on their own. Or drive them
out of the;country. ' , . " - •"'
Example: Right now the small businessman in Canada is
entitled to a law tax rate of 21% to 23% (depending, on the
Province) on his first $35,000 of taxable income. This gives
him the all-impartant cash to put back into his business.
This cash is 'hat keeps him afloat, and later helps him to
grow. Under the White Paper. the company will pay a flat --
50% on all taxable income or it willf' be taxed personally in
' his hands. He will have to put out , additional thousands of,
dollars in cash for taxes, money be sorely needs just to sur-
wive in the early years. 9 Q
Example;
A young lawyer, married, no children, bills his clients for
$25,000 "and has $101,000 work in process. He bas office az-"
penses of $9,000 and collects cash of $15,000. •
Present system:
Cash available ,° `"'
Tax payable '
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81?
lir
Balance left for food, shelter etc 85,183
- White Paper system
' Cash available $6,000
Tax: payable • 8,758
Borrowings to pay tax before any money
available for food; shelter etc Minus $2,7511
What Canada'might beelike after a fevn:years
- of White Paper taxation?
• Ther_..:. will be a. slow bait sure decline in the number of
small businesses.
• There will be a sharp drop in risk-taking by Canadians:
• The brain drain of talented young Canadians to other'
countries >-will grow. They will move to countries like
• If you're a student in law or medioine, will you
ever be able to set up your own practice?
• The first two: years are the toughest for any professional
man on his own. ;The expertssay you should be able to
. carry yourself for at least one year without cash income
from Yourpractice. 4,
That's wily, under the present tax `system, you pay tax on a
cash basis --on what money comes in. Under the White
Paper, you will pay on all accrual basis -on accounts re-
ceivable, and time billed, and work in process not yet ,
billed. ,, :
It makes little difference to .the Government in amount of
money collected over a 'period of years. But it poses a huge
hurdle for the young doctor;, lawyer, dentist, accountant, '
engineer or veterinarian starting .out on his own. ,
t
e i ni e . a es a o er. greater incen ives or ar
work and bright ideas.
• Foreign investment in Canada will slow down because of
the unfriendly tax climate. -
Capital will be withdrawn from Canada as people with
Modest wealth leave this country to retire elsewhere be-
cause of our Estate Tax and Capital Gains Tax Systems.
• The cost of money will rise as capital is removed front
Canadaand the,;, emaining capital is`diverted from debt
to equity -situations.
• The new tax system. *11) prevent the . build-up of private
capital M the hhnds Of individuals. Ultimately all econ-
omic power and capital will be, transferred to an all-
powerful Government -
What are you --going to do?
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Here are sonie1deas. ..,
1. The best --, write a letter to your Member of Parliament;
('if you do notknow his name use the box # and put your
address .,on the outside of your stamped envelope).' ,
Your letter does not need to be long or technical.'.
... or
. If yon" are•.' basically opposed to the White Paper, fill in
a coupon "below, Put it in a envelope and mail. to Box
_4430, Ottawa. If you put your name and address on, the
envelope, sit will :go directly aiid'tmopened to your MP.
plus -
3. Encourage yogr friends . tQ write to 'bear Members of
Parliament and to send in coupons.
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throughout Cao'ad& can b sent to: r •
0 "White -Paper" 1n Tfs tic/o CunaJh 0 Trutt, Hum! & `.Erie. •0
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110 'Yong. Street, Toronto 1, `Ontorio Y* ", o
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'rti stroti t �... opposed to a number of ,proposals' in the
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White Paper. . As my elected representative, I urge you to
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work toward' shelving the White Paper for further study.:
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Re E Mcksriley, MP
Pad.. Box 4430.
btfavva, Ontar'io, .
of plro osals' in the
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I am strongly , opposedm _ , ' p , p
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work toward;,aheiving the White Paper f6r furthe> study.
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Ottawa, C�rttario. • •Al
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