Rob Me Once

Rob Me Once -- Shame on You. Rob Me twice Shame on Me.

In the time period from 1996 to 2003 -- I have been told by a significant number of people that they have been heavily taxed on "Employment Income" that never happened -- and that thousands of other Canadians suffered the same fate.

These tax victims were people who participated in shares options plans promoted by their employers. The same shares, obtained in any other way, are only taxable on GAINS actually realized by the holder and then only if there is a real, tangible, spendable, profit realized.

Furthermore if a conventional share holder has some good years -- and pays "Capital Gains Taxes" -- followed by a year or so of real Losses -- then the shareholder can either apply the losses against previous years gains, (up to three years prior), and/or carry the losses forward indefinitely to be applied against future gains. When such Capital Losses are applied to past or future gains the shareholder realizes a reduction in the taxes paid, or payable, and that system works rather well.

No one asks the conventional shareholder how they came into possession of the shares they have or sell.

If, however, an employee participates in an employers shares reward, incentive plan the Canadian tax system becomes a booby trap. The shares obtained in this manner are now classed as a "Taxable Benefit" and the Canadian Department of Revenue obliges the employer to calculate any potential gain the employee might realize, at the time of purchase, and again at the time of delivery, and add this calculated -- as yet unrealized gain -- onto the employees actual "Employment Income" and taxes are then calculated on that phantom income total.

While some employees may have come away with real gains, many were taxed on gains that never materialized. Even those who made real profits were robbed because they are denied the priviledge of applying past, or future, shares losses to recover taxes paid on their temporary gain.

Those that never realized a gain of any kind were taxed on those imaginary gains for several years in the time period mentioned above. In many cases the tax alone was greater than the persons total real Employment Income and several victims, I know personally, had to borrow money, or mortgage their homes to pay those unfair taxes.

To compound the felony the current government recently made a deal with the employee's of the JDS Uniphase Corportion, in British Columbia to alleviate their deferred taxes on these so-called "Taxable Benefits".

To the present this tax relief is only for the JDS victims in BC and others in a similar situation are not included. Not even other victims in BC.

This article is an invitation to all other such victims to speak up and let the goverment know they will not support such discrimination in either the tax system and/or the preferential treatment of victimized Canadians.

Rob Me Twice -- Shame on Me.

Victor Drummond

vic.drummond@sympatico.ca