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 ©