LIGHT A CANDLE
A Commentary on Hand Wringing versus Action
By Victor Drummond ©
August 2007
Every Canadian, of voting age, has heard these sayings:-
“The Darkest Hour is Just before the dawn.”
“It is better to light a candle than to curse the darkness.”
“Into Every Life a Little Rain must fall.”
And each saying relates to negative and distressful events that all people experience
at various stages of their lives. People encounter problems of every kind imaginable.
A Little Rain:-
Some that are unavoidable, such as teething, colicky digestion, acne and a host of personal physical attributes that do not fit our self image. Then there are those problems we could avoid if we had foreknowledge of the hazards involved.
We could avoid catching colds -- if we knew who had one -- and kept clear of those people while they are at the infectious stage. This same ounce of prevention applies to a host of other infectious diseases.
With the development of anti-histamine medications people with infectious are now impossible to detect – until it is too late. This is one instance where one person’s food is another person’s poison.
According to another old saying there are only two things that are certain in life and the recurring one is “Taxes”
Everyone, who earns a living, has an income, or at least who has pocket money to buy things from a store, is paying taxes. This is a situation everyone is familiar with, to some extent, and as long as everyone is treated the same – the situation is tolerated.
The Darkest Hour:-
And like an infectious disease, if we know the hazards in advance we can avoid paying taxes that only apply to unique situations – such as taxes imposed on profits that never happened and on “Income” that never was – and never will be.
Most victims of these avoidable and unwarranted taxes were blind-sided when the “Taxable Benefits”, (TB), tax levy actually hit them.
Unfortunately being an unwitting victim, (of a unique tax situation, such as participating in an employer’s shares incentive rewards plans, e.g. (ESPP) and/or (ESO) and then being burdened with unexpected/avoidable taxes), does not solve the problem. And the consequences can, and do, place the victims in financial duress.
Things seldom look darker than when your home is threatened with seizure and your financial future is obscured by a deferred tax debt that exceeds your ability to pay. Thousands of innocent, hard working and honest Canadians suddenly found themselves burdened with huge taxes on money they never received.
The gloom deepens further when the victims find (that) the government has granted special tax relief, for a few of their members, but denied the same relief to the rest of them. Any reasonable person would be outraged at this situation. I know I am.
Light a candle:-
Again any reasonable person would, and should be able to, expect their member of parliament to take prompt corrective action to have the rights of their constituents, to fair and equal taxation, fully restored. (If not – Why not?)
That didn’t happen. Not even when the unfair atrocity was widely publicized in newspaper media -- did any government official even voice an objection to this atrocity -- or propose corrective action. (Why not?)
Very few, if any, of those victimized are independently wealthy. They are not Conrad Blacks – they are mainly ordinary people trying to maintain a modest standard of living. Average citizens who’s hopes and dreams of modest luxuries are now lost in the gloom of an unwarranted financial penalty.
The whole purpose of this blog page is to focus attention on the plight on Canada’s Tax victims and tarnished image of Canada due to Canadians denied a free, fair and just society.
Question:- Should the problem be fixed? Answer:- Yes Undoubtedly.
Question:-Who’s responsibility should it be to implement proper corrective action?
Answer:- In order of importance:-
(1)- The government of Canada currently in power. Although the problem evolved
during the reign of the Liberal Party only the current Members of Parliament
forming the government in power has the authority to introduce changes to
the Income Tax Act that would provide blanket correction of the
defective “Taxable Benefits” laws now in place.
(2)- Failing spontaneous effective corrective action, on the part of the government
in power, the only power left, that can force the issue, is in the hands of
the Canadian voter.
The Law Makers, of our “Fair” land are the sitting members of parliament –
BUT – the King Makers are the voters of Canada. You have the power to
bring this travesty of justice to a fair and proper conclusion permanently.
Question:- What would a proper corrective action consist of?
Answer:- The only fair and just solution is to revise the Canadian Income Tax Act
Regulations that deal with “Taxable Benefits” such that a reward or gift
of intangible value, such as market shares, which have no intrinsic value
of their own do not become taxable until, or unless, the property is sold
or iquidated for money or traded for something that has intrinsic value.
Solutions implemented, and/or proposed, that require the mass of Taxable
Benfits victims to appeal their case individually is NOT A PROPER FIX.
For Example:-
(a) The “Tax Court of Canada” is no solution and (b) the creation of a
powerless Fair Tax Ombudsman armed with a “Taxpayers Bill of Rights”
do absolutely nothing to provide fair treatment to all TB victims.
If anything these impromptu fixes only aggravate the problem – because
at the whim of some authority -- one victim will be treated one way -- and
another identical victim mistreated the other way.
Request:- If you recognize the unfairness, and injustice that the present Taxable
Benefit legislation is perpetuating and you wish to “LIGHT A CANDLE”
to dispel the darkness, for thousands of Canadians like yourself – then
use your power as a King Maker – notify all those, who solicit your vote
in the next Federal Election, – Commit to correcting the Income Tax
Laws of Canada – or NO VOTE.
You can make a difference and you can keep the ball rolling by sending
the address of this blog page to every Canadian you know of voting
age. This no cost action will:- Light your own candle.
Victor Drummond ©
Wednesday, August 29, 2007
Sunday, August 26, 2007
Hostage Canadians
CANADIANS HELD HOSTAGE AND TORTURED
A Commentary on the effect of the Canadian Income Tax Act
faulty legislation regarding “Taxable Benefits”
By Victor Drummond ©
August 26 2007
If the title of this commentary were an insignificant line on the back page of any back-woods publication reaching public attention -- anywhere in North America -- and the hostages were in some far off land THEN you could count on every newspaper in North America to decry this outlandish atrocity in banner headlines.
Not only that but Canadian political leaders would be on the next plane -- to wherever the atrocity was taking place. A leader of one of -- the wannabe Canadian Government political parties -- would be the first to declare someone, (preferably someone else), should begin negotiations with the leader(s) of this despicable country to release our citizens immediately.
Not only that but our fearless leaders would demand the offending government make a public apology and provide compensation to these victims for the mental anguish they have endured while being held hostage.
When the offending government is our own – and the Canadian Hostages are Canadian taxpayers -- who have deferred taxes on Income that never happened – and can only leave this country temporarily – else they will face immediate cancellation of their deferred taxes. The silence is deafening.
If you dismiss this situation as not being held hostage then read this excerpt from a message sent by a victim of this precise situation, to the former Minister of National Revenue. “ I have turned down several job offers in the USA which would have required me to move and most important of all – never selling one single share of the stock that I acquired from ESO’s … as this would trigger a massive debt on profits I would never see.”
Where are their champions? No where to be found – that’s where.
While these Canadians are tormented daily by the sword of Damocles – deferred taxes -- hanging over their head – waiting for the other shoe to drop.
If you doubt this is torment read the following excerpt from a message sent to the victims MP – speaking of the deferred tax this specific victim is now facing with payment demand on a new year deadline.:- “ brutally punitive and incredible harmful to the welfare of our families and our physical, mental and financial health.”
Where are their champions? No where to be found – that’s where.
In the present situation only the rare article decrying the unfairness -- and discriminatory treatment -- imposed on our victimized citizens ever appears in print.
No one in our present government -- or those aspiring to become our government -- have said one word to condemn this travesty -- and no government officials have shown any inclination to correct the problem.
So much for declared Fairness, Honesty, Integrity, and/or Equality policies of our government.
Think of these victimized Canadians every time you see or hear some Canadian political party leader -- or political promotional lackey -- declare their personal and/or party support of fair taxation or saying how they will improve things if elected.
Then say to them:- Show me your plan to correct the defective “Taxable Benefit” legislation and the compensation plan for its victims.
Victor Drummond ©
A Commentary on the effect of the Canadian Income Tax Act
faulty legislation regarding “Taxable Benefits”
By Victor Drummond ©
August 26 2007
If the title of this commentary were an insignificant line on the back page of any back-woods publication reaching public attention -- anywhere in North America -- and the hostages were in some far off land THEN you could count on every newspaper in North America to decry this outlandish atrocity in banner headlines.
Not only that but Canadian political leaders would be on the next plane -- to wherever the atrocity was taking place. A leader of one of -- the wannabe Canadian Government political parties -- would be the first to declare someone, (preferably someone else), should begin negotiations with the leader(s) of this despicable country to release our citizens immediately.
Not only that but our fearless leaders would demand the offending government make a public apology and provide compensation to these victims for the mental anguish they have endured while being held hostage.
When the offending government is our own – and the Canadian Hostages are Canadian taxpayers -- who have deferred taxes on Income that never happened – and can only leave this country temporarily – else they will face immediate cancellation of their deferred taxes. The silence is deafening.
If you dismiss this situation as not being held hostage then read this excerpt from a message sent by a victim of this precise situation, to the former Minister of National Revenue. “ I have turned down several job offers in the USA which would have required me to move and most important of all – never selling one single share of the stock that I acquired from ESO’s … as this would trigger a massive debt on profits I would never see.”
Where are their champions? No where to be found – that’s where.
While these Canadians are tormented daily by the sword of Damocles – deferred taxes -- hanging over their head – waiting for the other shoe to drop.
If you doubt this is torment read the following excerpt from a message sent to the victims MP – speaking of the deferred tax this specific victim is now facing with payment demand on a new year deadline.:- “ brutally punitive and incredible harmful to the welfare of our families and our physical, mental and financial health.”
Where are their champions? No where to be found – that’s where.
In the present situation only the rare article decrying the unfairness -- and discriminatory treatment -- imposed on our victimized citizens ever appears in print.
No one in our present government -- or those aspiring to become our government -- have said one word to condemn this travesty -- and no government officials have shown any inclination to correct the problem.
So much for declared Fairness, Honesty, Integrity, and/or Equality policies of our government.
Think of these victimized Canadians every time you see or hear some Canadian political party leader -- or political promotional lackey -- declare their personal and/or party support of fair taxation or saying how they will improve things if elected.
Then say to them:- Show me your plan to correct the defective “Taxable Benefit” legislation and the compensation plan for its victims.
Victor Drummond ©
Monday, August 20, 2007
The New Canadian LICOs
THE NEW POVERTY LINE
When are Canadians in Financial Difficulty?
Is this Canada Revenue Agency’s mandate?
A commentary on the Taxable Benefits Fiasco
by Victor Drummond ©
August 2007
Correction of hourly rate -- 22 Aug. 2007
The Canadian Council on Social Development,
using Statistics Canada’s Low IncomeCut-Offs,
have prepared a table of LICO’s
more commonly known as Canada’s Poverty Lines.
Incomes are listed for family sizes from 1 person to 7+ persons and community sizes from 500,000 and up – and also down to 30,000 and Rural.
Income refers to total pre-tax household income.
Using a typical family, of two adults and two children, living in a community of 100,000 people the Low-Income Cut Off level is listed as $33,251 dollars per year.
(figures updated from the year 2004).
There are a lot of variables that may enter into the calculations – for example are both parents employed outside the home, is a friend or relative providing free baby-sitting services, or are the children in a day-care center etc.
Assuming the mother is not working outside of the home and the father works a conventional
40 hr week = 2,080 hrs/year then his before tax hourly rate would be 33,251/2,080 = $16.00
This hourly rate is well above the legal minimum hourly rate for unskilled workers but there are still some families in “straightened circumstances” living in Canada.
But then again this figure is based upon pre-tax income. The only taxes this family might pay are the PST and GST – and there would be a GST rebate claimed at that income level.
Could a similar family of four, living in the same community, with a household income of $100,000 -- or more -- be living below the poverty line. You wouldn’t think so would you?
Then what about a family, with the $100,000 per year income, and identical living conditions, that have been levied a horrendous $250,000 tax on taxable benefits that they never received?
This tax alone is twice the total family income for two years. If they do not have the money in the bank and are required to borrow the money to pay this tax then they will have loan repayments and interest that cut into their income.
In terms of real income they are now worse off than the family that has a real – income tax free – income at the poverty line.
If they can not borrow the money and have no property to mortgage they must use the deferred tax option -- if available to them. Or standby, and watch, while the Canada Revenue Agency has their possessions seized and sold – either of which may kill their children’s prospects of a university education and/or any meaningful inheritance.
Until they can pay off this unwarranted debt they will remain financially worse off than the family that was only receiving the $33,251 annual income.
The flawed “Taxable Benefits” legislation has effectively brought these families financial balance below the poverty line – for as many years as it takes to pay off the unjustified debt.
They are in fact the new class of LICOs Canadians.
Is this the intended mandate of Canada’s Revenue Agency? Did the author(s), of Canada’s Income Tax Act, expect, or intend, this kind of situation to arise? Not likely.
Given the makers of this tax booby-trap had no stock market savvy they likely never expected those taxed on equities, at the time of delivery, would be penalized to the point of financial extermination. But it happened to many thousands of Canadian taxpayers.
With the impact of this defective legislation, now evident, it appears the Conservative Government, elected in 2006, recognized the unwarranted and crippling taxes that resulted and made a token effort to partially correct the problem by granting remission of these taxes to a select few victims in British Columbia.
Perhaps the magnitude of the problem wasn’t apparent, when the partial fix was first implemented, because the fix was then denied to thousands of identical tax victims in British Columbia and across Canada. The situation is now worse than before.
By denying equal treatment to all taxpayers, in an identical tax situation, the problem is further compounded by blatant discrimination.
Canada’s defective Taxable Benefits regulations are now not being applied equally.
If no corrective action is apparent when the next Federal election gets under way then every Canadian voter should clamor for this issue to be properly corrected.
It is just one more mess left behind by the previous government for the current – or incoming government -- to clean up.
Victor Drummond ©
When are Canadians in Financial Difficulty?
Is this Canada Revenue Agency’s mandate?
A commentary on the Taxable Benefits Fiasco
by Victor Drummond ©
August 2007
Correction of hourly rate -- 22 Aug. 2007
The Canadian Council on Social Development,
using Statistics Canada’s Low IncomeCut-Offs,
have prepared a table of LICO’s
more commonly known as Canada’s Poverty Lines.
Incomes are listed for family sizes from 1 person to 7+ persons and community sizes from 500,000 and up – and also down to 30,000 and Rural.
Income refers to total pre-tax household income.
Using a typical family, of two adults and two children, living in a community of 100,000 people the Low-Income Cut Off level is listed as $33,251 dollars per year.
(figures updated from the year 2004).
There are a lot of variables that may enter into the calculations – for example are both parents employed outside the home, is a friend or relative providing free baby-sitting services, or are the children in a day-care center etc.
Assuming the mother is not working outside of the home and the father works a conventional
40 hr week = 2,080 hrs/year then his before tax hourly rate would be 33,251/2,080 = $16.00
This hourly rate is well above the legal minimum hourly rate for unskilled workers but there are still some families in “straightened circumstances” living in Canada.
But then again this figure is based upon pre-tax income. The only taxes this family might pay are the PST and GST – and there would be a GST rebate claimed at that income level.
Could a similar family of four, living in the same community, with a household income of $100,000 -- or more -- be living below the poverty line. You wouldn’t think so would you?
Then what about a family, with the $100,000 per year income, and identical living conditions, that have been levied a horrendous $250,000 tax on taxable benefits that they never received?
This tax alone is twice the total family income for two years. If they do not have the money in the bank and are required to borrow the money to pay this tax then they will have loan repayments and interest that cut into their income.
In terms of real income they are now worse off than the family that has a real – income tax free – income at the poverty line.
If they can not borrow the money and have no property to mortgage they must use the deferred tax option -- if available to them. Or standby, and watch, while the Canada Revenue Agency has their possessions seized and sold – either of which may kill their children’s prospects of a university education and/or any meaningful inheritance.
Until they can pay off this unwarranted debt they will remain financially worse off than the family that was only receiving the $33,251 annual income.
The flawed “Taxable Benefits” legislation has effectively brought these families financial balance below the poverty line – for as many years as it takes to pay off the unjustified debt.
They are in fact the new class of LICOs Canadians.
Is this the intended mandate of Canada’s Revenue Agency? Did the author(s), of Canada’s Income Tax Act, expect, or intend, this kind of situation to arise? Not likely.
Given the makers of this tax booby-trap had no stock market savvy they likely never expected those taxed on equities, at the time of delivery, would be penalized to the point of financial extermination. But it happened to many thousands of Canadian taxpayers.
With the impact of this defective legislation, now evident, it appears the Conservative Government, elected in 2006, recognized the unwarranted and crippling taxes that resulted and made a token effort to partially correct the problem by granting remission of these taxes to a select few victims in British Columbia.
Perhaps the magnitude of the problem wasn’t apparent, when the partial fix was first implemented, because the fix was then denied to thousands of identical tax victims in British Columbia and across Canada. The situation is now worse than before.
By denying equal treatment to all taxpayers, in an identical tax situation, the problem is further compounded by blatant discrimination.
Canada’s defective Taxable Benefits regulations are now not being applied equally.
If no corrective action is apparent when the next Federal election gets under way then every Canadian voter should clamor for this issue to be properly corrected.
It is just one more mess left behind by the previous government for the current – or incoming government -- to clean up.
Victor Drummond ©
Friday, August 17, 2007
Canada's Golden Image
CANADA’S GOLDEN IMAGE
WITH FEET OF CLAY
Why thousands of Canadians can not
fully appreciate the good life in Canada.
A commentary on the foul taste left in the mouths
of Canada’s victims of the “Taxable Benefits” Fiasco.
By Victor Drummond ©
August 2007
Most Canadians – and those outside of Canada who have heard of this great land of freedom and opportunity – have a mental picture of Canada being a place where everyone is equal, and have personal and religious freedoms assured – a virtual paradise.
Although Canada does not have a statue of Liberty -- to welcome one and all to our shores -- Canada still projects an image of a knight in shining armour offering the tired and weary traveler a haven of rest and security. And that is the way it should be for all Canadians – but unfortunately it is not a universal reality.
For thousands of Canadians our symbolic knight is not perceived to be arrayed in shining armour and to make matters worse he has feet of clay.
Their view of our symbolic hero is seriously obscured by a tax burden -- which is unwarranted unjustified unfair and also discriminatory by way of a preferential tax remission – granted to a select few victims but not every victim of the same defective tax legislation.
They can not see past the mountain of debt they faced when taxes -- levied on “Income” they never received -- were imposed on an employment benefit that never materialized. (See prior postings for details.)
To them Canada’s image is one of living with a bully who has the power to extort money from them – money that many had to borrow in order to pay taxes that often exceeded their real income by a large margin.
The harm done -- by placing these taxpayers in the position of having to go into debt and/or mortgage their homes/property to pay an unjustified tax – can not be fully undone BUT the very least Canada’s current government should do is treat all such victims equally. Give all victims in Canada the same tax relief already given to a select group of JDS Employees in British Columbia in 2006.
That would go a long way towards helping everyone -- even the victims of our flawed tax laws -- to see our Canada as the complete – from head to toe -- symbolic knight in shining armour that it deserves to be.
In order to properly correct this tax problem the following actions are needed:-
(1) Apply the tax relief -- granted to the British Columbia JDS victims -- to all
Similar “Taxable Benefit” victims across Canada.
(2) Remove corporate shares from the “Taxable Benefits” classification and put
Them -- where they belong -- in the “Capital Equities” classification.
(3) Grant a retroactive 20 year amnesty to those who have already paid unjustified
Taxes and allow them to resubmit their tax returns listing their shares
transactions as Capital gains/losses as the actually were.
Contact every Canadian Voter you know and give them the web address of this blog page.
Tell everyone who asks -- who will you vote for in the next federal election?
“The candidate who belongs to a Political Party that will commit to correcting the unfair “Taxable Benefits” legislation – and who will apply the 3 proper steps listed.”
If you feel that I am the only blogger that recognizes the responsibility of the Canadian voters – then read the following excerpt from a posting on blogscanada.ca (E-Group) article titled: “Voters need some time for self-reflection” - by Cameron Holmstrom
“We keep rewarding politicians for telling us too much of what we want to hear, and not enough of what we need to hear. We have too many politicians telling us we can have our cake and eat it too. There are too many promises of tax cuts joined with service increases, which we all know is either going to lead to service cuts or tax increases. We reward those who tell us that they will do what they know they cannot, and we sadly punish those who bring out necessary measures that the people don't want to face. Honestly, it is just like teaching children. You don't reward their bad behavior, you correct it. Yet, this idea doesn't seem to be translating to politics in Canada.”
“Who is to blame for this condition??? The voting public is to blame. They are to blame because there are far too many voters who don't take the time to inform themselves on what the parties want to do, then those same people complain loudly when they do it after the are elected. They are to blame because they keep on returning those who act against what they want, or refuse to act for their constituents at all. They are to blame because they complain that they do not have choices, but they don't get involved and trying to make things better.”
“We, the voters, need to start rewarding those that do a good job and keep their promises.”
You can read the complete article at:-
http://www.blogscanada.ca/egroup/CommentView.aspx?guid=d305425c-e170-4903-a439-bb98197b9484
Victor Drummond ©
WITH FEET OF CLAY
Why thousands of Canadians can not
fully appreciate the good life in Canada.
A commentary on the foul taste left in the mouths
of Canada’s victims of the “Taxable Benefits” Fiasco.
By Victor Drummond ©
August 2007
Most Canadians – and those outside of Canada who have heard of this great land of freedom and opportunity – have a mental picture of Canada being a place where everyone is equal, and have personal and religious freedoms assured – a virtual paradise.
Although Canada does not have a statue of Liberty -- to welcome one and all to our shores -- Canada still projects an image of a knight in shining armour offering the tired and weary traveler a haven of rest and security. And that is the way it should be for all Canadians – but unfortunately it is not a universal reality.
For thousands of Canadians our symbolic knight is not perceived to be arrayed in shining armour and to make matters worse he has feet of clay.
Their view of our symbolic hero is seriously obscured by a tax burden -- which is unwarranted unjustified unfair and also discriminatory by way of a preferential tax remission – granted to a select few victims but not every victim of the same defective tax legislation.
They can not see past the mountain of debt they faced when taxes -- levied on “Income” they never received -- were imposed on an employment benefit that never materialized. (See prior postings for details.)
To them Canada’s image is one of living with a bully who has the power to extort money from them – money that many had to borrow in order to pay taxes that often exceeded their real income by a large margin.
The harm done -- by placing these taxpayers in the position of having to go into debt and/or mortgage their homes/property to pay an unjustified tax – can not be fully undone BUT the very least Canada’s current government should do is treat all such victims equally. Give all victims in Canada the same tax relief already given to a select group of JDS Employees in British Columbia in 2006.
That would go a long way towards helping everyone -- even the victims of our flawed tax laws -- to see our Canada as the complete – from head to toe -- symbolic knight in shining armour that it deserves to be.
In order to properly correct this tax problem the following actions are needed:-
(1) Apply the tax relief -- granted to the British Columbia JDS victims -- to all
Similar “Taxable Benefit” victims across Canada.
(2) Remove corporate shares from the “Taxable Benefits” classification and put
Them -- where they belong -- in the “Capital Equities” classification.
(3) Grant a retroactive 20 year amnesty to those who have already paid unjustified
Taxes and allow them to resubmit their tax returns listing their shares
transactions as Capital gains/losses as the actually were.
Contact every Canadian Voter you know and give them the web address of this blog page.
Tell everyone who asks -- who will you vote for in the next federal election?
“The candidate who belongs to a Political Party that will commit to correcting the unfair “Taxable Benefits” legislation – and who will apply the 3 proper steps listed.”
If you feel that I am the only blogger that recognizes the responsibility of the Canadian voters – then read the following excerpt from a posting on blogscanada.ca (E-Group) article titled: “Voters need some time for self-reflection” - by Cameron Holmstrom
“We keep rewarding politicians for telling us too much of what we want to hear, and not enough of what we need to hear. We have too many politicians telling us we can have our cake and eat it too. There are too many promises of tax cuts joined with service increases, which we all know is either going to lead to service cuts or tax increases. We reward those who tell us that they will do what they know they cannot, and we sadly punish those who bring out necessary measures that the people don't want to face. Honestly, it is just like teaching children. You don't reward their bad behavior, you correct it. Yet, this idea doesn't seem to be translating to politics in Canada.”
“Who is to blame for this condition??? The voting public is to blame. They are to blame because there are far too many voters who don't take the time to inform themselves on what the parties want to do, then those same people complain loudly when they do it after the are elected. They are to blame because they keep on returning those who act against what they want, or refuse to act for their constituents at all. They are to blame because they complain that they do not have choices, but they don't get involved and trying to make things better.”
“We, the voters, need to start rewarding those that do a good job and keep their promises.”
You can read the complete article at:-
http://www.blogscanada.ca/egroup/CommentView.aspx?guid=d305425c-e170-4903-a439-bb98197b9484
Victor Drummond ©
Monday, August 13, 2007
DO SOMETHING
SHOULDN’T SOMEONE?
A commentary on getting the job done.
By Victor Drummond ©
August 2007
Anyone who has read Jamie Golombek’s articles:- “What about the rest of us?”, and/or “Taxpayer’s Rights don’t apply equally.”, and/or Cindy E. Harnett & Jonathan Fowler’s article:- “Tories Kill Tax on Profits never made.”, -- OR -- has read any of the items posted on this blog – is aware that there is a serious abuse of certain Canadian Taxpayers.
Thousands of Canadians have been taxed on incomes that were artificially inflated by theoretical “Taxable Benefits” that never materialized. That is unfair, and unjustified taxation.
Shouldn’t someone do something about that?
A few Canadian taxpayers, victimized in this way, were granted remission of these illicit taxes while the vast majority of identical victims were denied the same relief.
This discriminatory treatment is both unfair and also a violation of article 15(1) of the rights “guaranteed” to every Canadian citizen by:- “The Charter of Rights and Freedoms”.
Shouldn’t someone do something about that?
In my younger days I carried the misconceived impression that the government of Canada was worth defending -- and I put my life at risk to do so – as I actually thought they, (the government), were on-the-job – as a guardian of Canadian citizens -- making certain all Canadians were fairly treated and protected against evil doers. In this instance it hasn’t happened.
How wrong can someone be?
Believe it or not – I actually expected – that members of parliament, (our law makers), would spontaneously jump into action to rectify any flawed legislation -- such as has now resulted in the taxation of citizens on false profits – within the jurisdiction of the Canadian Income Tax Act. In this instance it hasn’t happened.
How wrong can someone be?
Believe it or not – I actually expected the leaders of the opposition parties to seize upon the opportunity to show how concerned they are about serving the interests of the Canadian public by introducing a bill to correct the flawed Income Tax Legislation.
In this instance it hasn’t happened.
How wrong can someone be?
Believe it or not – I actually expected judges of the Supreme Court of Canada to spontaneously take action to rule against any judicial order that violates any article of the Canadian Charter of rights and Freedoms. Article 15(1) for example.
Such as restoring fairness to the JDS Tax Remission order so that it applies to all such tax victims. In this instance it hasn’t happened.
How wrong can someone be?
Believe it or not – I actually expected the office of the Federal Ethics Commissioner to take action when the unfair and discriminatory remission of taxes was granted to a select few victims in British Columbia.
This matter was brought to the attention of the Ethics Commissioner and the response was:- “This is a government issue that is outside of the mandate of the “Ethics Commissioner”.
How wrong can someone be?
There is a Federation of Canadian Taxpayers -- in existence -- that claims its purpose is to work for fairness in the Canadian Taxation system – perhaps they will take up this issue with the government to argue in favour of fair, just and equal treatment of the Canadian taxpayers.
But I wouldn’t hold my breath waiting for that to happen.
In my perspective the foregoing is a list of the SOME ONES who should take action – without coercion -- to correct the travesty of justice and violation of the Equality Under The Law that now exists in the application of the “Tax on almost Benefits”.
Being so wrong -- about so many aspects of “My Government” -- changes my entire evaluation of the “Canadian Political Set-up”.
All the Federal Political Parties pay lip service to serving the Canadian citizens – BUT when a real opportunity to do something about unfair, discriminatory, and unwarranted taxation – they all go blind, deaf and really DUMB.
Why?
Could it be they, (politicians), believe the Canadian voting population is so naïve and gullible that they will still support them regardless of their obvious failure to live up to their promises and claims to serve -- and preserve the wellbeing of -- the citizens of Canada?
Is it because Canadian voters are so acclimatized to being -- cheated -- lied to -- bamboozled and ripped-off -- by our government that they will vote for – what they perceive to be – the lesser of the available evils?
If that is the case:- Then someone SHOULD do something about it. BUT WHO? = YOU.
When those in power, and/or, a position to do something about a problem -- such as this -- fail to take action -- then the last word defaults to the voice of the Canadian voter.
If the voters also do nothing -- about such a problem then the government -- and those who aspire to become the government -- have no reason to change their policies.
They will continue to feed BS to the voting public and to perpetuate all manner of deceptions, rip-offs and miss-representations, without the slightest, concern that anyone will notice or care – or even if a few citizens are abused, and/or unfairly treated – no one will have the moxie to do anything about it.
The distress of the victimized Canadians is further aggravated by the unfair and unequal tax relief given to a few -- but denied for the vast majority -- of identical victims.
Today only some 60+ victims -- of the Taxable Benefits extortion -- have any reason to feel better about their plight – and the vast majority are left waiting for – at least equal and fair treatment.
If you are a Canadian, of voting age, and you expect your government to treat you – and you fellow Canadians fairly -- and to respect your intelligence -- to the extent that they do not even try to treat you like a mushroom, i.e. keep you in the dark and feed you dung.
THEN DO SOMETHING ABOUT IT.
Inform every Canadian – you know -- of voting age – about this blog page.
Personally contact your local MP, and notify same of your demand for fair tax treatment and that they personally will not receive your vote, or support, unless they -- and their party -- give a public commitment to correct the unfair “Taxable Benefits” tax issues -- in a timely manner.
A rating guide for a corrective action commitment is as follows:-
(E) (Equality Action) A commitment to apply the terms of the JDS Tax Remission order to all Canadian victims of the same unfair tax.
(C) (Corrective Action minimum) – Amend the Canadian Income Tax Act to exclude corporate shares from the “Taxable Benefits” classification and place them in the “Capital Equities” classification where they belong AND apply Step (E) above.
(A) (Absolute corrective Action) – Apply step (C) above and also provide a 20 year retroactive interval amnesty for those who previously paid taxes on nonexistent profits to allow them to resubmit their tax returns declaring Capital Gains/losses as may apply.
A commitment to do anything less than action (C) does not warrant any voter action .
(A) deserves everyone’s support.
If there is a failure to fix this problem – then the responsibility rests with the last persons who could have done anything to make the fix happen. That happens to be us:-The collective Canadian Voters.
Believe or not – I actually expect Canadian voters to collectively display intolerance for this unfair and unjust situation and to collectively apply pressure to those who, (or want to), govern this country -- to correct this problem income tax situation.
My belief in the Canadian government, and my expectations for honest, fair and just, spontaneous, action, have been wrong so often -- until now – it’s about time WE got it right.
Don’t let me, your fellow Canadians, and yourself down – DO SOMETHING ABOUT IT.
Victor Drummond ©
A commentary on getting the job done.
By Victor Drummond ©
August 2007
Anyone who has read Jamie Golombek’s articles:- “What about the rest of us?”, and/or “Taxpayer’s Rights don’t apply equally.”, and/or Cindy E. Harnett & Jonathan Fowler’s article:- “Tories Kill Tax on Profits never made.”, -- OR -- has read any of the items posted on this blog – is aware that there is a serious abuse of certain Canadian Taxpayers.
Thousands of Canadians have been taxed on incomes that were artificially inflated by theoretical “Taxable Benefits” that never materialized. That is unfair, and unjustified taxation.
Shouldn’t someone do something about that?
A few Canadian taxpayers, victimized in this way, were granted remission of these illicit taxes while the vast majority of identical victims were denied the same relief.
This discriminatory treatment is both unfair and also a violation of article 15(1) of the rights “guaranteed” to every Canadian citizen by:- “The Charter of Rights and Freedoms”.
Shouldn’t someone do something about that?
In my younger days I carried the misconceived impression that the government of Canada was worth defending -- and I put my life at risk to do so – as I actually thought they, (the government), were on-the-job – as a guardian of Canadian citizens -- making certain all Canadians were fairly treated and protected against evil doers. In this instance it hasn’t happened.
How wrong can someone be?
Believe it or not – I actually expected – that members of parliament, (our law makers), would spontaneously jump into action to rectify any flawed legislation -- such as has now resulted in the taxation of citizens on false profits – within the jurisdiction of the Canadian Income Tax Act. In this instance it hasn’t happened.
How wrong can someone be?
Believe it or not – I actually expected the leaders of the opposition parties to seize upon the opportunity to show how concerned they are about serving the interests of the Canadian public by introducing a bill to correct the flawed Income Tax Legislation.
In this instance it hasn’t happened.
How wrong can someone be?
Believe it or not – I actually expected judges of the Supreme Court of Canada to spontaneously take action to rule against any judicial order that violates any article of the Canadian Charter of rights and Freedoms. Article 15(1) for example.
Such as restoring fairness to the JDS Tax Remission order so that it applies to all such tax victims. In this instance it hasn’t happened.
How wrong can someone be?
Believe it or not – I actually expected the office of the Federal Ethics Commissioner to take action when the unfair and discriminatory remission of taxes was granted to a select few victims in British Columbia.
This matter was brought to the attention of the Ethics Commissioner and the response was:- “This is a government issue that is outside of the mandate of the “Ethics Commissioner”.
How wrong can someone be?
There is a Federation of Canadian Taxpayers -- in existence -- that claims its purpose is to work for fairness in the Canadian Taxation system – perhaps they will take up this issue with the government to argue in favour of fair, just and equal treatment of the Canadian taxpayers.
But I wouldn’t hold my breath waiting for that to happen.
In my perspective the foregoing is a list of the SOME ONES who should take action – without coercion -- to correct the travesty of justice and violation of the Equality Under The Law that now exists in the application of the “Tax on almost Benefits”.
Being so wrong -- about so many aspects of “My Government” -- changes my entire evaluation of the “Canadian Political Set-up”.
All the Federal Political Parties pay lip service to serving the Canadian citizens – BUT when a real opportunity to do something about unfair, discriminatory, and unwarranted taxation – they all go blind, deaf and really DUMB.
Why?
Could it be they, (politicians), believe the Canadian voting population is so naïve and gullible that they will still support them regardless of their obvious failure to live up to their promises and claims to serve -- and preserve the wellbeing of -- the citizens of Canada?
Is it because Canadian voters are so acclimatized to being -- cheated -- lied to -- bamboozled and ripped-off -- by our government that they will vote for – what they perceive to be – the lesser of the available evils?
If that is the case:- Then someone SHOULD do something about it. BUT WHO? = YOU.
When those in power, and/or, a position to do something about a problem -- such as this -- fail to take action -- then the last word defaults to the voice of the Canadian voter.
If the voters also do nothing -- about such a problem then the government -- and those who aspire to become the government -- have no reason to change their policies.
They will continue to feed BS to the voting public and to perpetuate all manner of deceptions, rip-offs and miss-representations, without the slightest, concern that anyone will notice or care – or even if a few citizens are abused, and/or unfairly treated – no one will have the moxie to do anything about it.
The distress of the victimized Canadians is further aggravated by the unfair and unequal tax relief given to a few -- but denied for the vast majority -- of identical victims.
Today only some 60+ victims -- of the Taxable Benefits extortion -- have any reason to feel better about their plight – and the vast majority are left waiting for – at least equal and fair treatment.
If you are a Canadian, of voting age, and you expect your government to treat you – and you fellow Canadians fairly -- and to respect your intelligence -- to the extent that they do not even try to treat you like a mushroom, i.e. keep you in the dark and feed you dung.
THEN DO SOMETHING ABOUT IT.
Inform every Canadian – you know -- of voting age – about this blog page.
Personally contact your local MP, and notify same of your demand for fair tax treatment and that they personally will not receive your vote, or support, unless they -- and their party -- give a public commitment to correct the unfair “Taxable Benefits” tax issues -- in a timely manner.
A rating guide for a corrective action commitment is as follows:-
(E) (Equality Action) A commitment to apply the terms of the JDS Tax Remission order to all Canadian victims of the same unfair tax.
(C) (Corrective Action minimum) – Amend the Canadian Income Tax Act to exclude corporate shares from the “Taxable Benefits” classification and place them in the “Capital Equities” classification where they belong AND apply Step (E) above.
(A) (Absolute corrective Action) – Apply step (C) above and also provide a 20 year retroactive interval amnesty for those who previously paid taxes on nonexistent profits to allow them to resubmit their tax returns declaring Capital Gains/losses as may apply.
A commitment to do anything less than action (C) does not warrant any voter action .
(A) deserves everyone’s support.
If there is a failure to fix this problem – then the responsibility rests with the last persons who could have done anything to make the fix happen. That happens to be us:-The collective Canadian Voters.
Believe or not – I actually expect Canadian voters to collectively display intolerance for this unfair and unjust situation and to collectively apply pressure to those who, (or want to), govern this country -- to correct this problem income tax situation.
My belief in the Canadian government, and my expectations for honest, fair and just, spontaneous, action, have been wrong so often -- until now – it’s about time WE got it right.
Don’t let me, your fellow Canadians, and yourself down – DO SOMETHING ABOUT IT.
Victor Drummond ©
Wednesday, August 8, 2007
Not Worth The Paper ...
NOT WORTH THE PAPER
A commentary on the Fair Market Value
(FMV) of Corporation Shares – and
Why they can never be a legitimate
“Taxable Benefit”
By Victor Drummond © August 2007
Addendum:- August 10 2007 -- For graphic evidence of the truth of this article see todays Globe and Mail -- editorial cartoon. Vic.
Addendum 2:- August 16 2007 -- As per addendum above -- see todays Globe and Mail -- editorial cartoon -- and the TSX opened down over 200 points today.
When the owners of a business decide to incorporate their enterprise -- and take the corporation public -- they make contact with investment underwriters to arrange terms for the initial financing and issuing of corporation shares.
If any underwriters are interested -- in the new corporation -- they establish the quantity and price of the new shares to be issued -- and the corporation receives an input of cash. The amount of money the corporation actually receives is the product of:- the number of shares to be underwritten and the arranged price per share – less any special charges levied by the underwriters – such as a finders fee.
The deal usually also includes the issuing of a second equity giving the underwriters a time limited option to purchase additional shares at a premium price. These equities are called warrants and may also be bought and sold on a stock exchange once the shares are listed and begin trading.
Setting the initial price of the new corporation shares involves taking into consideration a large number of factors -- such as:-
(a) The break-up value of the corporation’s assets.
(b) The demand for the corporations services/products.
(c) The track record of the corporations management.
(d) the market share the corporation now has and the prospect they will keep what they now have versus gaining/losing market share.
(e) The customer base and loyalty - (goodwill)- etc.
(f) The general overall market performance -- i.e. a bull market - a flat market or a
bear market.
(g) The dilution of the corporation shares -- if there are a large number of warrants outstanding that make shares available at a premium price then the market price will be limited to the warrant share price while the warrants are valid.
Although due consideration - of the foregoing factors - provides a ball-park guesstimate of a price the market will bear for the new shares issue – it is just that – a best guess.
Therefore corporation shares may go from low price to high price or vise-versa due to any number of factors – some of which have little or nothing to do with the overall performance of the corporation.
In other words corporation shares have no fixed intrinsic value of their own and consequently can not be fairly classed as a reward - or benefit - of any kind so long as they remain in such a volatile state.
Factors affecting the price of corporate shares are at best a good guess -- along with a flock of unpredictable variables. Share prices can rise and fall for no apparent reason – other than the whim of the investor/speculators and/or perceived market conditions – both real and imaginary.
Once all the parameters are established - and the underwriters have taken possession of their allotment of shares - warrants etc. they normally issue a prospectus promoting the purchase of the new shares – to their client list of investors/speculators -- directly from themselves -- via an “Initial Public Offering” (IPO).
This is usually an immediate prelude to the shares being listed on a conventional stock exchange - such as the Toronto Stock Exchange (TSX) and becoming generally available to all market investors and speculators.
Once the corporation shares become publicly traded their price becomes more of a result of market conditions than it does a reflection of the real worth of the corporation and/or its performance.
When bad news impacts on the markets in general – the price of the shares of a good corporation will be as much affected as will the price of the shares of a corporation that is doing poorly. When the BRE-X Minerals Indonesian Gold swindle was exposed all Gold Mining corporation shares were adversely effected.
When the Enron swindle was exposed all energy corporation shares were affected.
When the Nortel Networks creative accounting mischief was revealed all telecom corporation shares were affected. When the Martha Stewart mischief came to light all household products corporation shares were affected.
Last but not least when the over-sold Tech market bubble burst in July 2000 – and the stock markets went into a correction phase – all technical corporation shares went down like a stone.
The price of the shares of many profitable corporations were dictated entirely by what the bidders were willing to pay – not by what the corporation was doing -- or not doing -- in their day-to-day operations.
Every year hundreds of corporations -- that were recently listed on Canadian Stock Exchanges – just disappear completely from the exchange listing. When that happens the shares of most delisted corporations are not worth the paper they are written on.
Holders of shares in high flying corporations such as BRE-X (BXM) and Nortel Networks(NT) ended up with equities that they had paid many dollars per share -- to acquire -- that with little - or no - warning some fell to a level where they were not worth the paper they were written on.
There is no such thing as a solid “Fair Market Value” for corporation shares trading on a conventional stock exchange.
The past performance of a stock is no guarantee that the next trade will be as good - or better - or that the seller will be matched to a bidder who will pay the asking price and who will also buy the quantity of shares the seller is trying to sell.
A seller who places a “Sell-at-market” order on their shares will be lucky indeed to get anything near the price desired.
There are just too many variables that make a farce of trying to fix a real FMV on any corporate shares. The only time a corporation share has a fixed value is when it is exchanged for hard currency -- or for any other item having intrinsic value.
Until then it is merely a token which may provide a profitable return – but more likely it may not.
Consequently The Canadian Income Tax Act is flawed to the extent that it permits classifying corporate shares - acquired via an Employee Stock Purchase Plan - as a “Taxable Benefit” while those equities are still in a state of undetermined value.
It is a disgrace for Canada to tax people on Income they never received.
It is blight on the image of the Canadian Income Tax System and no credit to any political party that created the problem or those politicians who allow it to remain in operation during their term in power.
It is a violation of the Canadian Charter of Rights and Freedoms - article 15(1) - to grant tax remission to some victims of the “Taxable Benefits” boondoggle while denying the same treatment under the law to all other identical victims.
Is Canada really that hard-up for revenue that we need to Tax our citizens this unfairly? Do you suppose?
Check out the following article:- http://loudmouthsays.blogspot.com/2005/08/deliberate-over-taxation-no-better.html
Shouldn’t SOMEONE do something to correct this problem?
Victor Drummond ©
A commentary on the Fair Market Value
(FMV) of Corporation Shares – and
Why they can never be a legitimate
“Taxable Benefit”
By Victor Drummond © August 2007
Addendum:- August 10 2007 -- For graphic evidence of the truth of this article see todays Globe and Mail -- editorial cartoon. Vic.
Addendum 2:- August 16 2007 -- As per addendum above -- see todays Globe and Mail -- editorial cartoon -- and the TSX opened down over 200 points today.
When the owners of a business decide to incorporate their enterprise -- and take the corporation public -- they make contact with investment underwriters to arrange terms for the initial financing and issuing of corporation shares.
If any underwriters are interested -- in the new corporation -- they establish the quantity and price of the new shares to be issued -- and the corporation receives an input of cash. The amount of money the corporation actually receives is the product of:- the number of shares to be underwritten and the arranged price per share – less any special charges levied by the underwriters – such as a finders fee.
The deal usually also includes the issuing of a second equity giving the underwriters a time limited option to purchase additional shares at a premium price. These equities are called warrants and may also be bought and sold on a stock exchange once the shares are listed and begin trading.
Setting the initial price of the new corporation shares involves taking into consideration a large number of factors -- such as:-
(a) The break-up value of the corporation’s assets.
(b) The demand for the corporations services/products.
(c) The track record of the corporations management.
(d) the market share the corporation now has and the prospect they will keep what they now have versus gaining/losing market share.
(e) The customer base and loyalty - (goodwill)- etc.
(f) The general overall market performance -- i.e. a bull market - a flat market or a
bear market.
(g) The dilution of the corporation shares -- if there are a large number of warrants outstanding that make shares available at a premium price then the market price will be limited to the warrant share price while the warrants are valid.
Although due consideration - of the foregoing factors - provides a ball-park guesstimate of a price the market will bear for the new shares issue – it is just that – a best guess.
Therefore corporation shares may go from low price to high price or vise-versa due to any number of factors – some of which have little or nothing to do with the overall performance of the corporation.
In other words corporation shares have no fixed intrinsic value of their own and consequently can not be fairly classed as a reward - or benefit - of any kind so long as they remain in such a volatile state.
Factors affecting the price of corporate shares are at best a good guess -- along with a flock of unpredictable variables. Share prices can rise and fall for no apparent reason – other than the whim of the investor/speculators and/or perceived market conditions – both real and imaginary.
Once all the parameters are established - and the underwriters have taken possession of their allotment of shares - warrants etc. they normally issue a prospectus promoting the purchase of the new shares – to their client list of investors/speculators -- directly from themselves -- via an “Initial Public Offering” (IPO).
This is usually an immediate prelude to the shares being listed on a conventional stock exchange - such as the Toronto Stock Exchange (TSX) and becoming generally available to all market investors and speculators.
Once the corporation shares become publicly traded their price becomes more of a result of market conditions than it does a reflection of the real worth of the corporation and/or its performance.
When bad news impacts on the markets in general – the price of the shares of a good corporation will be as much affected as will the price of the shares of a corporation that is doing poorly. When the BRE-X Minerals Indonesian Gold swindle was exposed all Gold Mining corporation shares were adversely effected.
When the Enron swindle was exposed all energy corporation shares were affected.
When the Nortel Networks creative accounting mischief was revealed all telecom corporation shares were affected. When the Martha Stewart mischief came to light all household products corporation shares were affected.
Last but not least when the over-sold Tech market bubble burst in July 2000 – and the stock markets went into a correction phase – all technical corporation shares went down like a stone.
The price of the shares of many profitable corporations were dictated entirely by what the bidders were willing to pay – not by what the corporation was doing -- or not doing -- in their day-to-day operations.
Every year hundreds of corporations -- that were recently listed on Canadian Stock Exchanges – just disappear completely from the exchange listing. When that happens the shares of most delisted corporations are not worth the paper they are written on.
Holders of shares in high flying corporations such as BRE-X (BXM) and Nortel Networks(NT) ended up with equities that they had paid many dollars per share -- to acquire -- that with little - or no - warning some fell to a level where they were not worth the paper they were written on.
There is no such thing as a solid “Fair Market Value” for corporation shares trading on a conventional stock exchange.
The past performance of a stock is no guarantee that the next trade will be as good - or better - or that the seller will be matched to a bidder who will pay the asking price and who will also buy the quantity of shares the seller is trying to sell.
A seller who places a “Sell-at-market” order on their shares will be lucky indeed to get anything near the price desired.
There are just too many variables that make a farce of trying to fix a real FMV on any corporate shares. The only time a corporation share has a fixed value is when it is exchanged for hard currency -- or for any other item having intrinsic value.
Until then it is merely a token which may provide a profitable return – but more likely it may not.
Consequently The Canadian Income Tax Act is flawed to the extent that it permits classifying corporate shares - acquired via an Employee Stock Purchase Plan - as a “Taxable Benefit” while those equities are still in a state of undetermined value.
It is a disgrace for Canada to tax people on Income they never received.
It is blight on the image of the Canadian Income Tax System and no credit to any political party that created the problem or those politicians who allow it to remain in operation during their term in power.
It is a violation of the Canadian Charter of Rights and Freedoms - article 15(1) - to grant tax remission to some victims of the “Taxable Benefits” boondoggle while denying the same treatment under the law to all other identical victims.
Is Canada really that hard-up for revenue that we need to Tax our citizens this unfairly? Do you suppose?
Check out the following article:- http://loudmouthsays.blogspot.com/2005/08/deliberate-over-taxation-no-better.html
Shouldn’t SOMEONE do something to correct this problem?
Victor Drummond ©
Monday, August 6, 2007
No Army
NO ARMY ON EARTH
Amendment of Canada’s Income Tax Act
Is long past due – A commentary
By Victor Drummond ©
August 2007
There is a line, somewhere, that declares:- “No army on earth can halt the advance of an idea who’s time has come.”
Amending Canada’s Income Tax act to remove stock market shares, (no matter how acquired), from the “Taxable Benefits” classification to the “Capital Investment” classification is the right thing to do and action to implement this change is long past due.
When hairs are split as to how and when a person acquired corporation shares the stage is set for unequal, unjust and unfair taxation.
As the Tax Act is at the present time, in some circumstances corporation shares are treated as a Capital Investment – and in other circumstances the same shares are treated as a “Taxable Benefit” – even when no real benefit is realized.
When this happens the taxpayer is taxed on the OPPORTUNITY to have made a gain – not on any real income. This is an unwarranted tax -- levied under the PRETENCE the taxpayer has received some form of BENEFIT from his/her employer.
Then after the Taxpayer has been gouged with taxes on theoretical gains the Canada Revenue Agency isn’t finished yet.
Now by implication the shares already taxed as a “Benefit” become subject to a “Capital Gains Tax” if by chance the shares might happen to be sold for a real profit that exceeds the total acquisition cost -- benefit tax included.
When the taxpayer manages to realize a “Capital Gain” adequate to offset the previous tax levied as a “Benefit” plus original cost then he/she is very fortunate – because the deck is loaded in the Tax Agencies favour as follows:-
(1) When the taxpayer is holding a winning hand -- with shares that have increased in value well above the initial cost – and the taxpayer wishes to continue to hold these shares -- he/she may continue to hold those shares -- BUT the “Benefit”?? tax is levied when the taxpayer takes control of the shares.
Chances are the taxpayer will need to sell some – or all -- shares just to offset the tax.
Because the benefit tax is levied at the time of delivery of the shares the taxpayer is denied, -- in this instance – any possible opportunity of additional gain.
(2) When the shares are profitable, at time of delivery, and the “benefit” tax is applied
but the shares are still held by the taxpayer there comes a time when those shares drop well below the level they were taxed at BUT the taxpayer is blocked from recovering any of the money already paid on the POTENTIAL GAIN.
This is not a tax on “INCOME” or on a “BENEFIT” in any sense of the word.
It is an unwarranted extortion of money on a benefit that never materialized.
A thief who steals valuables from his/her employer is treated better.
(See prior posting – Partners in Crime.)
Believe it or not the Canadian Revenue Agency actually gives a tax refund to criminals who declare their ill-gotten gains – pay tax on the booty – and then lose the benefit of their crime. Ref;- Canada Revenue Agency Interpretive Bulletin Number IT-256R
There is no mention in this document of restoring any of the stolen property to its rightful owner -- or reporting the crime to the authorities. ??
How can any Government -- that declares itself to have “Fair Taxation” as a plank in their election platform – standby and allow such a travesty of justice and “Unfair Taxation” continue to operate on their watch?
Dear reader:- Do you not agree the time is long past for a Reform of Canada’s Income Tax Act?
The time has, in fact, come for such an idea and if you agree – then make some noise.
Pass the address of this blog page on to every Canadian of voting age that you know.
Contact your MP. Tell all those who ask you:- "Who would you vote for in the next federal election?" – what you demand of all political parties that solicit your vote:- “Truly Fair Income Taxation” (see prior postings:- Stone Walls, Not a Leader, for corrective action needed.)
Victor Drummond ©
Amendment of Canada’s Income Tax Act
Is long past due – A commentary
By Victor Drummond ©
August 2007
There is a line, somewhere, that declares:- “No army on earth can halt the advance of an idea who’s time has come.”
Amending Canada’s Income Tax act to remove stock market shares, (no matter how acquired), from the “Taxable Benefits” classification to the “Capital Investment” classification is the right thing to do and action to implement this change is long past due.
When hairs are split as to how and when a person acquired corporation shares the stage is set for unequal, unjust and unfair taxation.
As the Tax Act is at the present time, in some circumstances corporation shares are treated as a Capital Investment – and in other circumstances the same shares are treated as a “Taxable Benefit” – even when no real benefit is realized.
When this happens the taxpayer is taxed on the OPPORTUNITY to have made a gain – not on any real income. This is an unwarranted tax -- levied under the PRETENCE the taxpayer has received some form of BENEFIT from his/her employer.
Then after the Taxpayer has been gouged with taxes on theoretical gains the Canada Revenue Agency isn’t finished yet.
Now by implication the shares already taxed as a “Benefit” become subject to a “Capital Gains Tax” if by chance the shares might happen to be sold for a real profit that exceeds the total acquisition cost -- benefit tax included.
When the taxpayer manages to realize a “Capital Gain” adequate to offset the previous tax levied as a “Benefit” plus original cost then he/she is very fortunate – because the deck is loaded in the Tax Agencies favour as follows:-
(1) When the taxpayer is holding a winning hand -- with shares that have increased in value well above the initial cost – and the taxpayer wishes to continue to hold these shares -- he/she may continue to hold those shares -- BUT the “Benefit”?? tax is levied when the taxpayer takes control of the shares.
Chances are the taxpayer will need to sell some – or all -- shares just to offset the tax.
Because the benefit tax is levied at the time of delivery of the shares the taxpayer is denied, -- in this instance – any possible opportunity of additional gain.
(2) When the shares are profitable, at time of delivery, and the “benefit” tax is applied
but the shares are still held by the taxpayer there comes a time when those shares drop well below the level they were taxed at BUT the taxpayer is blocked from recovering any of the money already paid on the POTENTIAL GAIN.
This is not a tax on “INCOME” or on a “BENEFIT” in any sense of the word.
It is an unwarranted extortion of money on a benefit that never materialized.
A thief who steals valuables from his/her employer is treated better.
(See prior posting – Partners in Crime.)
Believe it or not the Canadian Revenue Agency actually gives a tax refund to criminals who declare their ill-gotten gains – pay tax on the booty – and then lose the benefit of their crime. Ref;- Canada Revenue Agency Interpretive Bulletin Number IT-256R
There is no mention in this document of restoring any of the stolen property to its rightful owner -- or reporting the crime to the authorities. ??
How can any Government -- that declares itself to have “Fair Taxation” as a plank in their election platform – standby and allow such a travesty of justice and “Unfair Taxation” continue to operate on their watch?
Dear reader:- Do you not agree the time is long past for a Reform of Canada’s Income Tax Act?
The time has, in fact, come for such an idea and if you agree – then make some noise.
Pass the address of this blog page on to every Canadian of voting age that you know.
Contact your MP. Tell all those who ask you:- "Who would you vote for in the next federal election?" – what you demand of all political parties that solicit your vote:- “Truly Fair Income Taxation” (see prior postings:- Stone Walls, Not a Leader, for corrective action needed.)
Victor Drummond ©
Wednesday, August 1, 2007
Assumptions
ASS – U – ME
A commentary on the arbitrary aspects of
“The Canadian Income Tax Act”
and the power of “The Canada Revenue Agency”
to levy REAL TAXES on the basis of “ASSUMPTIONS”
by Victor Drummond ©
August 2007
According to Revenue Canada’s “Guide to Employers – Taxable Benefits” document T4130 (E) Rev. 06, certain gifts -- of tangible value -- bestowed by employers on their employees -- are either taxable benefits, or exempt of taxation -- on the basis of rather arbitrary regulations.
For example on page 14, “Gifts and awards” -- “Example 1:- You give your employee a gift card or gift certificate with a value of $100.00 to a department store.” “The employee can use this to choose whatever merchandise or service the store offers.” “The gift card or gift certificate is additional remuneration and therefore a taxable benefit to the employee because there is an element of choice.”
Page 15:- “Example 2:- You give your employee tickets to a specific event on a specific date and time.” This is not a taxable benefit since there is no element of choice.”
These examples look OK at first glance BUT upon closer examination a few loop-holes and booby-traps are found in this arrangement.
There are worlds of variables here that render the above rulings arbitrary and unfair.
The element of choice is stated as the deciding factor between tax and no tax.
BUT no one knows whether or not there really is an element of choice in every instance.
In both examples the employee may be reluctant to refuse any gift offer, of their employer, for risk of creating an offence. No choice here in either case.
Then there is the real possibility the gift, of a gift card, is to a department store the employee would never patronizes, for many possible reasons. This results in the employee is being taxed on a benefit never realized. (Sounds familiar)
Then there is the lack of a specific limit on the value and/or quantity of event tickets the employee may be given. The employee may be given dozens of tickets for box seats at a Grand Final Sporting event that has been sold out for months. Scalpers getting $1000.00 per ticket. (Not reportable as a Taxable Benefit.)
The employee may not even need to leave the house to liquidate tickets worth thousands of dollars. Allowing there is time -- the tickets could be sold on E-Bay.
A bit of a loop-hole here don’t you think?
The foregoing misguided tax regulations are based upon assumptions made by the author(s) of the Taxable Benefits regulations.
No one, however, is going to make an issue, or launch an appeal to the Canada Revenue Agency, if they were overtaxed on an unused $100 gift card/certificate, or got away without paying tax on a few thousand dollars worth of event tickets.
If that were the limit of the harm done -- via assumptions made by the Canada Revenue Agency -- there would be no problem worth mentioning.
There is at least one instance, however, when The Canada Revenue Agency can, and does, make an equally arbitrary assumption that costs some taxpayers hundreds of thousands of dollars.
That assumption is built into the “Taxable Benefits” regulation pertaining to employee’s who hold onto their ESO/ESPP shares past their exercise date.
The built-in assumption being (that) the employee has voluntarily elected to accept a market risk rather than apply the “Cashless Sale” provision that is part of most employee incentive/rewards shares plans. This assumption is then used to apply real taxes on the opportunity the employee is assumed to have voluntarily declined for real gains.
First of all there is no solid basis for this assumption. No one has taken a poll to determine what percentage of those, so taxed, had a real opportunity to accept the cashless sale option -- as opposed to the number that were denied that opportunity for any number of possible situations. (Ref. prior post:- “Stone Walls …”)
Second there is a double standard here -- in that when a gift or award is given an employee it has one identity. It either has intrinsic value of its own, or it does not.
If the gift item has no intrinsic value then the item is not, and does not become, anything else but a token gift -- until the recipient converts the item into something that has real value.
In the case of employers shares, or stock market stocks of any kind, no matter how acquired, they have no intrinsic value as long as they sit in the employee’s account.
It is both unreasonable and unfair to impose any tax, (that is not offset by real losses), on any POTENTIAL profit those paper certificates may appear to represent.
Canada Revenue Agency does not end their damaging assumptions at this point either. Now that they have levied a real tax on phantom gains and the employee has paid the ransom on his/her ESO/ESPP “Taxable (yet to become any kind of) Benefit” the same shares when still held by the employee magically turn into another taxable item, i.e. a “Capital Asset” subject to “Capital Gains Taxes.” BUT if these new entities happen to produce a LOSS the taxpayer is denied recovery of any taxes already paid on that other entity, i.e. The non-existent:- “Taxable Benefit”.
Talk about eating your cake and having it to.
The street definition of the word “ASSUME” applies in full measure in this case.
It makes an “ASS” of “YOU” and “ME”
If you are a Canadian of voting age you can apply pressure on those in a position to correct this intolerable, unfair and unjust, situation.
Just contact those, who campaign for your vote -- in the next Federal Election -- and make it clear to them:- if they personally, and their political party, do not commit to correcting this problem -- in a timely manner – they will not get your vote.
Give the same message to any pollster that contacts you – asking about your intention to support one political party or another – and pass the web address of this blog page along to all the Canadian contacts you have -- of voting age.
You will be doing yourself and your fellow Canadians a real favour.
You may reach your MP by regular mail, postage free, or telephone, or
by E-mail via the following web page and following the links to the list of sitting MP’s.http://webinfo.parl.gc.ca/MembersOfParliament/MainMPsAddressList.aspx?TimePeriod=Current&Language=E
Victor Drummond ©
A commentary on the arbitrary aspects of
“The Canadian Income Tax Act”
and the power of “The Canada Revenue Agency”
to levy REAL TAXES on the basis of “ASSUMPTIONS”
by Victor Drummond ©
August 2007
According to Revenue Canada’s “Guide to Employers – Taxable Benefits” document T4130 (E) Rev. 06, certain gifts -- of tangible value -- bestowed by employers on their employees -- are either taxable benefits, or exempt of taxation -- on the basis of rather arbitrary regulations.
For example on page 14, “Gifts and awards” -- “Example 1:- You give your employee a gift card or gift certificate with a value of $100.00 to a department store.” “The employee can use this to choose whatever merchandise or service the store offers.” “The gift card or gift certificate is additional remuneration and therefore a taxable benefit to the employee because there is an element of choice.”
Page 15:- “Example 2:- You give your employee tickets to a specific event on a specific date and time.” This is not a taxable benefit since there is no element of choice.”
These examples look OK at first glance BUT upon closer examination a few loop-holes and booby-traps are found in this arrangement.
There are worlds of variables here that render the above rulings arbitrary and unfair.
The element of choice is stated as the deciding factor between tax and no tax.
BUT no one knows whether or not there really is an element of choice in every instance.
In both examples the employee may be reluctant to refuse any gift offer, of their employer, for risk of creating an offence. No choice here in either case.
Then there is the real possibility the gift, of a gift card, is to a department store the employee would never patronizes, for many possible reasons. This results in the employee is being taxed on a benefit never realized. (Sounds familiar)
Then there is the lack of a specific limit on the value and/or quantity of event tickets the employee may be given. The employee may be given dozens of tickets for box seats at a Grand Final Sporting event that has been sold out for months. Scalpers getting $1000.00 per ticket. (Not reportable as a Taxable Benefit.)
The employee may not even need to leave the house to liquidate tickets worth thousands of dollars. Allowing there is time -- the tickets could be sold on E-Bay.
A bit of a loop-hole here don’t you think?
The foregoing misguided tax regulations are based upon assumptions made by the author(s) of the Taxable Benefits regulations.
No one, however, is going to make an issue, or launch an appeal to the Canada Revenue Agency, if they were overtaxed on an unused $100 gift card/certificate, or got away without paying tax on a few thousand dollars worth of event tickets.
If that were the limit of the harm done -- via assumptions made by the Canada Revenue Agency -- there would be no problem worth mentioning.
There is at least one instance, however, when The Canada Revenue Agency can, and does, make an equally arbitrary assumption that costs some taxpayers hundreds of thousands of dollars.
That assumption is built into the “Taxable Benefits” regulation pertaining to employee’s who hold onto their ESO/ESPP shares past their exercise date.
The built-in assumption being (that) the employee has voluntarily elected to accept a market risk rather than apply the “Cashless Sale” provision that is part of most employee incentive/rewards shares plans. This assumption is then used to apply real taxes on the opportunity the employee is assumed to have voluntarily declined for real gains.
First of all there is no solid basis for this assumption. No one has taken a poll to determine what percentage of those, so taxed, had a real opportunity to accept the cashless sale option -- as opposed to the number that were denied that opportunity for any number of possible situations. (Ref. prior post:- “Stone Walls …”)
Second there is a double standard here -- in that when a gift or award is given an employee it has one identity. It either has intrinsic value of its own, or it does not.
If the gift item has no intrinsic value then the item is not, and does not become, anything else but a token gift -- until the recipient converts the item into something that has real value.
In the case of employers shares, or stock market stocks of any kind, no matter how acquired, they have no intrinsic value as long as they sit in the employee’s account.
It is both unreasonable and unfair to impose any tax, (that is not offset by real losses), on any POTENTIAL profit those paper certificates may appear to represent.
Canada Revenue Agency does not end their damaging assumptions at this point either. Now that they have levied a real tax on phantom gains and the employee has paid the ransom on his/her ESO/ESPP “Taxable (yet to become any kind of) Benefit” the same shares when still held by the employee magically turn into another taxable item, i.e. a “Capital Asset” subject to “Capital Gains Taxes.” BUT if these new entities happen to produce a LOSS the taxpayer is denied recovery of any taxes already paid on that other entity, i.e. The non-existent:- “Taxable Benefit”.
Talk about eating your cake and having it to.
The street definition of the word “ASSUME” applies in full measure in this case.
It makes an “ASS” of “YOU” and “ME”
If you are a Canadian of voting age you can apply pressure on those in a position to correct this intolerable, unfair and unjust, situation.
Just contact those, who campaign for your vote -- in the next Federal Election -- and make it clear to them:- if they personally, and their political party, do not commit to correcting this problem -- in a timely manner – they will not get your vote.
Give the same message to any pollster that contacts you – asking about your intention to support one political party or another – and pass the web address of this blog page along to all the Canadian contacts you have -- of voting age.
You will be doing yourself and your fellow Canadians a real favour.
You may reach your MP by regular mail, postage free, or telephone, or
by E-mail via the following web page and following the links to the list of sitting MP’s.http://webinfo.parl.gc.ca/MembersOfParliament/MainMPsAddressList.aspx?TimePeriod=Current&Language=E
Victor Drummond ©
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