THE THREE MONKEYS
A commentary on the conduct of the Canadian
Political party leaders in the knowledge of
the evils worked by the
defective taxable benefits legislation.
By Victor Drummond © Sept 2007
Most everyone in Canada, of voting age, is familiar with the motto illustrated by three monkeys sitting along side of each other.
One monkey has his front paws held over his mouth, another has his paws over his eyes and the third monkey has his paws over his ears. Each monkey is illustrating a moral value.
The moral point being made by the first monkey is:- “Speak No Evil” -- the second monkey makes the point:- “See no evil” and the third monkey makes the point:- “Hear No evil”.
When the point of reference is the observers personal behaviour then the moral lesson is a positive factor and if the observer follows the monkey’s example it could save everyone a lot of pain and suffering.
But what if the monkey's moral message is adopted by our Canadian political leaders who are immersed in an environment of lies, deceit and injustice.
Should they therefore ignore the evil events around them and pretend they:- “See no evil”, “Hear no evil” and never raise their voice to denounce “Evil”?
Would such a group of deaf, dumb and blind individuals be capable of operating a country – such as Canada – in a fair, honest, and just manner? Not on your life.
They lack the intelligence, integrity, honesty, moxie and ability to do the job right.
So read the prior article:- “Will Canada’s Real Leader…..” and make sure the candidate you vote for is willing to acknowledge “Evil” when he/she “See’s” or “Hears”, it and will
take appropriate action to correct the problem.
For starters ask which political leader will acknowledge the evil worked by the defective taxable benefit legislation and which one will commit to correcting same??
Those political leaders who continue to pretend there is no problem -- are just monkey’s with no moral lesson to teach.
Victor Drummond ©
Sunday, September 30, 2007
Wednesday, September 26, 2007
Looking for....
WILL CANADA’S REAL LEADER
PLEASE STAND UP
A commentary on the stony silence by Canada’s
Political Leaders on the Issue of Unfair Taxation.
by Victor Drummond © September 2007
Like the television show -- of a few years back -- we now have several people claiming to be the best option as Canada’s next prime minister – and best qualified to form Canada’s next Government.
The television show provided three people who all claimed to be the real: McCoy : but only one of them actually was.
The other two were impostors, well briefed in the details of McCoy’s history, i.e. mother’s maiden name, father’s occupation, school McCoy attended, and all such details as may deceive the panel attempting to find: The Real McCoy.
The panel usually consisted of well known personalities, (of the time), such as journalists, Gordon Sinclair, Margaret Atwood, Pierre Burton and/or a well known politician such as David Crombie.
Panellists were allowed to question each contender on items they felt would reveal the impostors and help them identify the real McCoy.
After a few minutes of questions the shows moderator would halt the questioning and ask each of the panellists to tell which of the contenders – they thought – was the real McCoy.
When each panellist had stated their selected contestant the moderator would then say: “Will the real McCoy please stand up.”
As I recall a few programs the panellists success rate was about 50/50.
Canada now has a number of political leaders contending to become our next prime minister and to form our next government. Hopefully with a comfortable majority.
They are all currently vying for key issues to beat their drums about in order to convince the voters of this “fair” land that they – and their cadre of potential Members of Parliament, are the real McCoy.
That they alone will give our citizens -- the very best in Government -- and administration of Canada’s natural resources, finances and standard of living.
That they alone will improve Canada’s image on the world stage, will upgrade our standard of living, will provide full employment, will take care of our homeless population, will solve our healthcare problems, will resolve education issues, etc.
Of course at, or near the top of the list is what to do about “Global Warming”. This is a red hot Issue – even though compared to countries like the United States, and China, and India Canada’s contribution of Greenhouse Gasses -- to the whole – is about 2% of the total i.e. quite insignificant.
Never-the-less the potential next prime minister can garner a lot of votes
by promising to meet some arbitrary reduction of Canada’s GHG contribution within some not-too-distant future date.
Another red-hot issue is getting Canada’s troops out of harms way in the middle east.
That is a really tough issue. If we withdraw our troops while the Americans and British are still fighting the good fight -- then there are a whole host of potential downsides – ranging from deserting our allies in the middle of battle -- to abandoning helpless women and children to a fate as bad -- or worse than death.
This is a difficult issue to be sure. And do not forget the old adage:- Politics and war make for strange bedfellows. Your enemy one day often becomes one of your allies the next.
But played carefully this issue can get the political candidate -- for prime minister -- a lot of votes.
How about some issues on the home front? Say for example the rise of the Canadian dollar to par or more with the USA dollar?
This item has a lot of pros and cons. The Canadian Auto Industry see’s declining sales and wholesale loss of employment. Likewise Canada’s retail and tourist industry.
On the other hand Canada’s travellers – especially those who winter in the tropical regions of the USA and Europe -- see a big advantage in our rising dollar.
Thousands of Canadians are figuratively breaking the sound barrier to go shopping in the USA with their newfound par money.
Where do the brownie points maximize on this issue?
Should the would-be next prime minister promise to lower Canadian Interest rates to suppress the Canadian dollar and give local home and car buyers a bit of a break?
How about the issue of “Fair Taxation”? Of course every political leader feels safe in Promising “FAIR TAXATION”
That very plank was listed twice in the Conservative Election platform during the 2006 election campaign.
In fact not only was the commitment made – in general terms – but some real action actually took place.
This happened when the newly elected Conservative Member of Parliament -- for the riding of: “Saanich – Gulf Islands” -- in British Columbia succeeded in getting a tax remission order issued, in 2006, to cancel deferred taxes on money the select group of taxpayers had never received.
Nice start Mr. Gary Lunn and Right Honourable Stephen Harper – you were
both on the right track – no one should ever be taxed on trumped up
“Earned” income that was neither “Earned” nor “Income”.
But what happened? Those 60+ employees --of the now defunct JDS Uniphase plant in British Columbia -- who you saw fit to treat “fairly” were only a wart on the elephant.
They represent a very small fraction of the total number of the “taxable benefits” fraud victims that have been exploited for years -- right across Canada.
Is it because of the size of the felony that has caused you, and all of your party members, to clam up on this issue? Even the Conservative Party blog page administrators won’t even acknowledge a question on this issue.
Is the cause any less “just” because it involves more money, and many
more victims,than was realized at first? The very opposite should be true.
The more extensive the problem the more urgent is the need for corrective action.
The more widespread the injustice and the more of our taxpayers -- who
have been victimized -- should add to the need to correct the problem – not run and hide from it.
There is more than adequate evidence that this crime -- against Canadian taxpayers -- has been brought to the attention of every current Canadian political leader, more than once.
Yet not one has dared to admit to the existence of this issue – let alone make election promises to correct the problem. Why not?
Do they all place a cash value on their integrity, and, credibility? It sure seems so.
Should the Canadian voters reward any of them for their honesty -- in not facing an issue they have no intention, or hope, of correcting – and therefore avoid making phoney promises?
Definitely not.
There are all kinds of contenders who will promise nothing and deliver exactly that.
Canada does not need a political leader who can not recognize an injustice
when it is repeatedly brought to his/her attention.
Canadians do not need a political leader that hides from local injustices while making a big issue of getting a bit of justice for a paltry few – defending the rights of others – even those in far away lands but ignoring the rights of the victims of injustice right here in Canada.
If there is a real political leader – out there – that will acknowledge the atrocious treatment imposed on Canadian taxpayers -- via the defective “taxable benefit” legislation – and will commit to taking real, and timely, action to rectify this problem:
THAT LEADER IS: “THE REAL McCOY.”
WILL HE OR SHE PLEASE STAND UP?
MANY THOUSANDS OF CANADIAN VICTIMS ARE WAITING TO VOTE FOR YOU.
Victor Drummond ©
PLEASE STAND UP
A commentary on the stony silence by Canada’s
Political Leaders on the Issue of Unfair Taxation.
by Victor Drummond © September 2007
Like the television show -- of a few years back -- we now have several people claiming to be the best option as Canada’s next prime minister – and best qualified to form Canada’s next Government.
The television show provided three people who all claimed to be the real: McCoy : but only one of them actually was.
The other two were impostors, well briefed in the details of McCoy’s history, i.e. mother’s maiden name, father’s occupation, school McCoy attended, and all such details as may deceive the panel attempting to find: The Real McCoy.
The panel usually consisted of well known personalities, (of the time), such as journalists, Gordon Sinclair, Margaret Atwood, Pierre Burton and/or a well known politician such as David Crombie.
Panellists were allowed to question each contender on items they felt would reveal the impostors and help them identify the real McCoy.
After a few minutes of questions the shows moderator would halt the questioning and ask each of the panellists to tell which of the contenders – they thought – was the real McCoy.
When each panellist had stated their selected contestant the moderator would then say: “Will the real McCoy please stand up.”
As I recall a few programs the panellists success rate was about 50/50.
Canada now has a number of political leaders contending to become our next prime minister and to form our next government. Hopefully with a comfortable majority.
They are all currently vying for key issues to beat their drums about in order to convince the voters of this “fair” land that they – and their cadre of potential Members of Parliament, are the real McCoy.
That they alone will give our citizens -- the very best in Government -- and administration of Canada’s natural resources, finances and standard of living.
That they alone will improve Canada’s image on the world stage, will upgrade our standard of living, will provide full employment, will take care of our homeless population, will solve our healthcare problems, will resolve education issues, etc.
Of course at, or near the top of the list is what to do about “Global Warming”. This is a red hot Issue – even though compared to countries like the United States, and China, and India Canada’s contribution of Greenhouse Gasses -- to the whole – is about 2% of the total i.e. quite insignificant.
Never-the-less the potential next prime minister can garner a lot of votes
by promising to meet some arbitrary reduction of Canada’s GHG contribution within some not-too-distant future date.
Another red-hot issue is getting Canada’s troops out of harms way in the middle east.
That is a really tough issue. If we withdraw our troops while the Americans and British are still fighting the good fight -- then there are a whole host of potential downsides – ranging from deserting our allies in the middle of battle -- to abandoning helpless women and children to a fate as bad -- or worse than death.
This is a difficult issue to be sure. And do not forget the old adage:- Politics and war make for strange bedfellows. Your enemy one day often becomes one of your allies the next.
But played carefully this issue can get the political candidate -- for prime minister -- a lot of votes.
How about some issues on the home front? Say for example the rise of the Canadian dollar to par or more with the USA dollar?
This item has a lot of pros and cons. The Canadian Auto Industry see’s declining sales and wholesale loss of employment. Likewise Canada’s retail and tourist industry.
On the other hand Canada’s travellers – especially those who winter in the tropical regions of the USA and Europe -- see a big advantage in our rising dollar.
Thousands of Canadians are figuratively breaking the sound barrier to go shopping in the USA with their newfound par money.
Where do the brownie points maximize on this issue?
Should the would-be next prime minister promise to lower Canadian Interest rates to suppress the Canadian dollar and give local home and car buyers a bit of a break?
How about the issue of “Fair Taxation”? Of course every political leader feels safe in Promising “FAIR TAXATION”
That very plank was listed twice in the Conservative Election platform during the 2006 election campaign.
In fact not only was the commitment made – in general terms – but some real action actually took place.
This happened when the newly elected Conservative Member of Parliament -- for the riding of: “Saanich – Gulf Islands” -- in British Columbia succeeded in getting a tax remission order issued, in 2006, to cancel deferred taxes on money the select group of taxpayers had never received.
Nice start Mr. Gary Lunn and Right Honourable Stephen Harper – you were
both on the right track – no one should ever be taxed on trumped up
“Earned” income that was neither “Earned” nor “Income”.
But what happened? Those 60+ employees --of the now defunct JDS Uniphase plant in British Columbia -- who you saw fit to treat “fairly” were only a wart on the elephant.
They represent a very small fraction of the total number of the “taxable benefits” fraud victims that have been exploited for years -- right across Canada.
Is it because of the size of the felony that has caused you, and all of your party members, to clam up on this issue? Even the Conservative Party blog page administrators won’t even acknowledge a question on this issue.
Is the cause any less “just” because it involves more money, and many
more victims,than was realized at first? The very opposite should be true.
The more extensive the problem the more urgent is the need for corrective action.
The more widespread the injustice and the more of our taxpayers -- who
have been victimized -- should add to the need to correct the problem – not run and hide from it.
There is more than adequate evidence that this crime -- against Canadian taxpayers -- has been brought to the attention of every current Canadian political leader, more than once.
Yet not one has dared to admit to the existence of this issue – let alone make election promises to correct the problem. Why not?
Do they all place a cash value on their integrity, and, credibility? It sure seems so.
Should the Canadian voters reward any of them for their honesty -- in not facing an issue they have no intention, or hope, of correcting – and therefore avoid making phoney promises?
Definitely not.
There are all kinds of contenders who will promise nothing and deliver exactly that.
Canada does not need a political leader who can not recognize an injustice
when it is repeatedly brought to his/her attention.
Canadians do not need a political leader that hides from local injustices while making a big issue of getting a bit of justice for a paltry few – defending the rights of others – even those in far away lands but ignoring the rights of the victims of injustice right here in Canada.
If there is a real political leader – out there – that will acknowledge the atrocious treatment imposed on Canadian taxpayers -- via the defective “taxable benefit” legislation – and will commit to taking real, and timely, action to rectify this problem:
THAT LEADER IS: “THE REAL McCOY.”
WILL HE OR SHE PLEASE STAND UP?
MANY THOUSANDS OF CANADIAN VICTIMS ARE WAITING TO VOTE FOR YOU.
Victor Drummond ©
Sunday, September 23, 2007
Not a Taxable Benefit
THE CREDIBILITY FACTOR
CORPORATE SHARES NOT A TAXABLE BENEFIT Part II
By Victor Drummond ©
September 2007
In my previous article “CORPORATE SHARES ARE NOT A TAXABLE BENEFIT” I issued a challenge to anyone to try and prove me wrong.
That challenge was accepted by “Berris” who made a very convincing counter point by quoting the following statements from the very same document I had used to support my rationalizations.
The follow on statements are:-
“Cash and near-cash gifts or awards are always a taxable benefit to the employee.”
“Non-cash gifts or non-cash awards, on the other hand, may not be considered a taxable benefit, under certain circumstances.”
“A near-cash item is one that can easily converted to cash, such as a gift certificate, gift card, gold nuggets, securities or stocks.”
This very clear declaration in the T4130 Guide to Employer’s certainly appears to prove me wrong -- but lets exam the document more closely.
There is a mix of items listed as “near-cash” – some that meet the “Taxable Benefit” classification criteria, i.e. “Tangible”, and ALSO including some major feature such as:- “offering a variety of choices to the holder and/or possessing “INTRINSIC value” AND one item that does not, e.g. stock and corporate shares.
Which of the “near-cash items -- listed above -- actually meet the specified:- “Taxable Benefit” definition criteria?
(1) Gift certificate, or Gift Card. fully meet the “Taxable Benefit” classification criteria
(2) Gold Nuggets -- and Gold Dust: actually pre-date minted currency
in the USA and Canada.
They both are “Tangible” and both have “Intrinsic” value.
They provide an infinite variety of choices to the holder and are
therefore a no contest “Taxable Benefit.”
(3) Securities i.e. A Guaranteed Investment Certificate, (GIC), is:- “Tangible”.
It also has a face value and an “Intrinsic” value.
It also offers the holder a wide variety of places – and a wide variety of
times where and when it may be converted directly to cash.
A GIC therefore definitely qualifies as a “Taxable Benefit.
(4) Stocks – Have No “Tangible” aspects – No stock certificates are issued
anymore so the holder has nothing that can be touched.
When actual stock certificates were issued they seldom carried a face
value – and when they did carry a face value it was usually in the form
of:- “Par Value $1.00”.
Stocks do not convert to cash as easily as the “Tax Excluded Event
Tickets”.
That is because in the case of stocks a bidding process is involved
– and because stocks can only be converted to cash via one institution
i.e. the Stock Exchange the time and place of conversion to cash is
much more limited.
In fact the holder of Event Tickets can convert them to cash in more
places and at more times than can a stock holder convert shares.
Stocks can not be scalped on the street, or sold on the internet auction
markets e.g. E-Bay.
Stocks/shares therefore provide even less “Choice” options than
those: “Tax Excluded” Event Tickets.
Corporate shares and company stocks are the only item passed off as a
“Taxable Benefit” that:-
(1) Produces a real tax on a fabricated non-income that is then falsely
reported as: “Earned Income”.
This is not a creditable situation. It is unwarranted taxation of a
potential Gain and the felony is further compounded by then denying the
taxpayer any possible recovery of the unjustified taxes via the “Capital
Loss” claim. This denial is made in spite of the fact that document T4037
(page 15) specifically describes further profit gained on those same shares
is to be reported as a “Capital Gain”.
One minute a “Taxable Benefit” and the next minute a “Capital Equity”???
How many other “Taxable Benefits” can perform this transition?
Conclusion (1):- THIS SITUATION IS ABSOLUTELY INCREDIBLE.
(2) Produces the need for document T1212 –
“STATEMENT OF DEFERRED SECURITY OPTIONS BENFITS”. ???
Unless the taxpayer is being taxed at a level well beyond their:
REAL EARNED INCOME there is no need for this document.
Real Income taxes should always be payable out of the taxpayers
actual “Income”. When that is not possible -- then something is
very very out of kilter.
Document T1212 merely fills a need to try and make the classification of
stocks and shares appear to produce a legitimate taxable “Income” --
when in fact they haven’t yet been converted to a “Tangible” cash or cash
equivalent that might be taxed fairly.
Then in an attempt to make the taxation of unrealized income appear to
be – somewhat charitable to the victimized taxpayer – the T1212 form
includes a condition whereby the taxpayer can claim a “security
options deduction” by reporting securities sold, during the year,
on line 249 of the taxpayers tax return.
This unexplained “securities options deduction” turns out to be nothing
more or less that the same deduction formerly given by reporting the
pretend gain at the current inclusion rate.
But the name now sounds more like a generous gift on the part of the CRA.
(2):- THE VERY EXISTANCE OF FORM T1212 IS ABSOLUTELY INCREDIBLE.
(3) Of the almost infinite number of ways a person may come into
possession of shares of a corporation, or a company, what REAL
difference does it make -- to anyone –- which method was actually
employed?
The factors of interest to the CRA are:- Quantity, acquisition cost,
liquidation gain. or loss.
These factors are present no matter how the shares, or stock, are acquired.
The CRA doesn’t even care if the shares are stolen, (see prior posting:-
“Partners in Crime”).
For some reason if the taxpayer acquires employer’s shares via an
Employee Share Purchase Plan, (ESPP), or an Employer Shares Option,
(ESO), plan AND the employer -- in both cases -- is not a Canadian Controlled
Private Corporation, (CCPC), THEN the shares are classified as:-
“A taxable benefit”?
WHY? Especially when so many special interpretations and guideline
explanations are required in order to make the “taxable benefit”
classification look and sound legitimate – AND after being
taxed,on pretend gains, the shares automatically become – what they
really always were – A CAPITAL EQUITY.
Every additional brochure, guideline, and/or pamphlet -- issued by the CRA
–- attempting to provide a reason for making shares and stocks fit the
taxable benefit classification and to make this classification appear
justified – merely adds more credibility to the fact that stocks and
shares:
DO NOT FIT IN THE TAXABLE BENEFIT CLASSIFICATION – UNDER ANY
CIRCUMSTANCES.
Conclusion (3):- CLASSING SHARES AND STOCKS AS A TAXABLE BENEFIT
LACKS ANY FORM OF CREDIBILITY.
Now how about this statement in the document T4130 that declares:
“A near-cash item is one that can easily converted to cash, such as a gift certificate, gift card, gold nuggets, securities or stocks.” AND “Cash and near-cash gifts or awards are always a taxable benefit to the employee.”
I have already pointed out that according to the basic definition of a “taxable benefit” that shares and stocks are less qualified than the tax excluded:- “Event Tickets” according to their:- Lack of a “tangible” aspect, Lack of an “Intrinsic” value and lack of holders choice as to when, where and how the shares/stocks may be converted to anything of real value.
So what is the result of this conflict? It adds up to NOTHING MORE OR LESS THAN
A CONTRADICTION OF CLASSIFICATION CRITERIA.
When a dispute arises due to CONTRADICTIONS in document terms, and/or conditions,
an arbitrator -- or other judiciary agent, i.e. Court of Law, -- will study the
document to determine the intent of the author(s) when the terms and conditions were initially compiled, and to resolve the dispute fairly on conclusions reached.
The process is not difficult – so lets have a go at it.
The source document -- of CRA Bulletin T4130 – “Employer’s Guide to “Taxable Benefits” and of CRA Document T4037 – the Capital Gains Guide.-- is the:- Canadian Income Tax Act, (CITA)
This document is passed by Canada’s Parliament, and the senate and signed into law by the queens representative – Canada’s Governor General and the Prime Minister of Canada.
It is implied -- by its title -- the Canadian Income Tax Act, (CITA), is intended to set out the terms and conditions under which the government Tax Administration agency – The Canada Revenue Agency, (CRA), may levy taxes on the “INCOME” of Canadian citizens.
(Not on a pretend potential Income of Canadian citizens.)
Clarification of the base CITA document -- articles, and sub-articles -- is left to the administration agency (CRA) which attempts to make the rules and regulations a bit clearer under a wide range of conditions and circumstances.
They endeavour to do this by way of “Interpretive Documents”, Rulings publications and Guideline documents such as the:- “Employers Guide to Taxable Benefits T4130”.
Even then taxpayers often need to request rulings from the CRA when the published guides e.g. T4130 and Interpretation Bulletin’s and Information Circulars etc. do not provide a clear answer to their specific situation.
Although the CRA may endeavour to correctly interpret the intent of the CITA author’s the interpreters are only human and prone to make errors – the same as everyone else.
The contradiction encountered in Guide T4130 is a prime example of a probable
interpretation error.
So we compare the impact -- and bottom line consequences of allowing both of the possible Classifications of shares/stocks to be assumed to be true – one at a time -- and applying the one classification that offers the most reasonable bottom line result.
(A) Assuming stocks and shares are actually a “Taxable Benefit”.
The bottom line results are:-
(A-1) Taxpayers end up being taxed on money they never actually received.
(A-2) Taxpayers are not treated “Fairly”, or “Equally” under the law.
(A-3) Taxpayers with deferred taxes are penalized if they move out of Canada.
(A-4) Taxpayers who have paid taxes on shares (per a potential but unrealized
profit)are prevented from claiming any part of the taxes paid if the shares
later actually produce a loss.
This situation is a mix of unfair and unreasonable and unwarranted
results.
There are two other legal documents recently passed by parliament, and the senate, and signed into the laws of Canada. Being more recent they should automatically take precedence over prior acts signed into Canadian Law.
The first is “The Canadian Charter of Rights and Freedoms”, (TCCORF) signed into Canadian Law by both the Prime Minister of Canada and the Queen of England, (Canada), personally.
The second is the:- “The Taxpayer Bill of Rights”, (TBOR).
Result (A-1) above is clearly a violation of the Taxpayers right to fair taxation.
Result (A-2) above is a violation of TCCORF article 15(1) and a violation of TBOR article 8.
Result (A-3) above is a violation of TCCORF) article 6(1).
Result (A-4) above is another infringement of TCCORF article 15(1).
It is unreasonable to believe the original authors of the Canadian Income Tax Act intended any of the A-1 to A-4 results to be the outcome when they originally wrote the terms and articles of the
“Income Tax Act".
==============================================
(B) Assuming stocks/shares are not a “Taxable Benefit”
The bottom line results are:-
(B-1) The Taxpayer only pays taxes on money actually received at the time of sale
– and then only if the shares/stocks are sold at a profit,
i.e. “A GENUINE CAPITAL GAIN, (INCOME), IS REALIZED”
(B-2) If the Taxpayer has previously paid taxes on a realized Capital Gain -- and
then suffers a Capital Loss – the loss may be applied to recover Capital
Gains Taxes paid within the prior three years – or carried forward
indefinitely -- to be applied against any future Capital Gains.
Results (B-1), and (B-2) above do not violate any articles of neither the TCCORF nor the TBOR. This interpretation is by far the most fair, reasonable and justified of the two possibilities.
This outcome is far more believable -- as being the intended result -- when the authors originally wrote the terms and articles of the Canadian Income Tax Act.
SUMARRY OF BOTTOM LINE RESULTS:-
When corporate shares or stocks ARE classed as a “Taxable Benefit”:-
Results (A-1) through (A-4) both cheat the Taxpayer and violate articles of a superior Act passed by:- Parliament, and the senate and signed by the Prime Minister of Canada and by the Queen of England (and Canada) personally, i.e. “The Canadian Charter of Rights and Freedoms.”
Article 8 of “The Taxpayers Bill of Rights is also violated.
CLASSIFICATION OF STOCKS AND SHARES AS A TAXABLE BENEFIT HAS ZERO CREDIBILITY
==============================================
When corporate shares or stocks are NOT classed as a “Taxable Benefit”:-
Results (B-1), and (B-2) above do not violate any articles of neither the TCCORF nor the TBOR and therefore provide the best possible bottom line result.
THIS RESULT HAS 100% CREDIBILITY.
It is obvious therefore that the authors of the CITA never intended Corporation shares or stocks -- in general -- to be classed as a “Taxable Benefit” when they created the CITA.
Conclusion:- Stocks/shares neither meet the definition criteria of a “Taxable Benefit” nor the credibility factor and are consequently NOT A TAXABLE BENEFIT.”
Live with this situation – if you can -- If you can not live with Injustice, Unfairness and/or Unequal treatment of your fellow taxpayers then spread the word:-
No public commitment to correct this situation means NO VOTE.
Victor Drummond ©
CORPORATE SHARES NOT A TAXABLE BENEFIT Part II
By Victor Drummond ©
September 2007
In my previous article “CORPORATE SHARES ARE NOT A TAXABLE BENEFIT” I issued a challenge to anyone to try and prove me wrong.
That challenge was accepted by “Berris” who made a very convincing counter point by quoting the following statements from the very same document I had used to support my rationalizations.
The follow on statements are:-
“Cash and near-cash gifts or awards are always a taxable benefit to the employee.”
“Non-cash gifts or non-cash awards, on the other hand, may not be considered a taxable benefit, under certain circumstances.”
“A near-cash item is one that can easily converted to cash, such as a gift certificate, gift card, gold nuggets, securities or stocks.”
This very clear declaration in the T4130 Guide to Employer’s certainly appears to prove me wrong -- but lets exam the document more closely.
There is a mix of items listed as “near-cash” – some that meet the “Taxable Benefit” classification criteria, i.e. “Tangible”, and ALSO including some major feature such as:- “offering a variety of choices to the holder and/or possessing “INTRINSIC value” AND one item that does not, e.g. stock and corporate shares.
Which of the “near-cash items -- listed above -- actually meet the specified:- “Taxable Benefit” definition criteria?
(1) Gift certificate, or Gift Card. fully meet the “Taxable Benefit” classification criteria
(2) Gold Nuggets -- and Gold Dust: actually pre-date minted currency
in the USA and Canada.
They both are “Tangible” and both have “Intrinsic” value.
They provide an infinite variety of choices to the holder and are
therefore a no contest “Taxable Benefit.”
(3) Securities i.e. A Guaranteed Investment Certificate, (GIC), is:- “Tangible”.
It also has a face value and an “Intrinsic” value.
It also offers the holder a wide variety of places – and a wide variety of
times where and when it may be converted directly to cash.
A GIC therefore definitely qualifies as a “Taxable Benefit.
(4) Stocks – Have No “Tangible” aspects – No stock certificates are issued
anymore so the holder has nothing that can be touched.
When actual stock certificates were issued they seldom carried a face
value – and when they did carry a face value it was usually in the form
of:- “Par Value $1.00”.
Stocks do not convert to cash as easily as the “Tax Excluded Event
Tickets”.
That is because in the case of stocks a bidding process is involved
– and because stocks can only be converted to cash via one institution
i.e. the Stock Exchange the time and place of conversion to cash is
much more limited.
In fact the holder of Event Tickets can convert them to cash in more
places and at more times than can a stock holder convert shares.
Stocks can not be scalped on the street, or sold on the internet auction
markets e.g. E-Bay.
Stocks/shares therefore provide even less “Choice” options than
those: “Tax Excluded” Event Tickets.
Corporate shares and company stocks are the only item passed off as a
“Taxable Benefit” that:-
(1) Produces a real tax on a fabricated non-income that is then falsely
reported as: “Earned Income”.
This is not a creditable situation. It is unwarranted taxation of a
potential Gain and the felony is further compounded by then denying the
taxpayer any possible recovery of the unjustified taxes via the “Capital
Loss” claim. This denial is made in spite of the fact that document T4037
(page 15) specifically describes further profit gained on those same shares
is to be reported as a “Capital Gain”.
One minute a “Taxable Benefit” and the next minute a “Capital Equity”???
How many other “Taxable Benefits” can perform this transition?
Conclusion (1):- THIS SITUATION IS ABSOLUTELY INCREDIBLE.
(2) Produces the need for document T1212 –
“STATEMENT OF DEFERRED SECURITY OPTIONS BENFITS”. ???
Unless the taxpayer is being taxed at a level well beyond their:
REAL EARNED INCOME there is no need for this document.
Real Income taxes should always be payable out of the taxpayers
actual “Income”. When that is not possible -- then something is
very very out of kilter.
Document T1212 merely fills a need to try and make the classification of
stocks and shares appear to produce a legitimate taxable “Income” --
when in fact they haven’t yet been converted to a “Tangible” cash or cash
equivalent that might be taxed fairly.
Then in an attempt to make the taxation of unrealized income appear to
be – somewhat charitable to the victimized taxpayer – the T1212 form
includes a condition whereby the taxpayer can claim a “security
options deduction” by reporting securities sold, during the year,
on line 249 of the taxpayers tax return.
This unexplained “securities options deduction” turns out to be nothing
more or less that the same deduction formerly given by reporting the
pretend gain at the current inclusion rate.
But the name now sounds more like a generous gift on the part of the CRA.
(2):- THE VERY EXISTANCE OF FORM T1212 IS ABSOLUTELY INCREDIBLE.
(3) Of the almost infinite number of ways a person may come into
possession of shares of a corporation, or a company, what REAL
difference does it make -- to anyone –- which method was actually
employed?
The factors of interest to the CRA are:- Quantity, acquisition cost,
liquidation gain. or loss.
These factors are present no matter how the shares, or stock, are acquired.
The CRA doesn’t even care if the shares are stolen, (see prior posting:-
“Partners in Crime”).
For some reason if the taxpayer acquires employer’s shares via an
Employee Share Purchase Plan, (ESPP), or an Employer Shares Option,
(ESO), plan AND the employer -- in both cases -- is not a Canadian Controlled
Private Corporation, (CCPC), THEN the shares are classified as:-
“A taxable benefit”?
WHY? Especially when so many special interpretations and guideline
explanations are required in order to make the “taxable benefit”
classification look and sound legitimate – AND after being
taxed,on pretend gains, the shares automatically become – what they
really always were – A CAPITAL EQUITY.
Every additional brochure, guideline, and/or pamphlet -- issued by the CRA
–- attempting to provide a reason for making shares and stocks fit the
taxable benefit classification and to make this classification appear
justified – merely adds more credibility to the fact that stocks and
shares:
DO NOT FIT IN THE TAXABLE BENEFIT CLASSIFICATION – UNDER ANY
CIRCUMSTANCES.
Conclusion (3):- CLASSING SHARES AND STOCKS AS A TAXABLE BENEFIT
LACKS ANY FORM OF CREDIBILITY.
Now how about this statement in the document T4130 that declares:
“A near-cash item is one that can easily converted to cash, such as a gift certificate, gift card, gold nuggets, securities or stocks.” AND “Cash and near-cash gifts or awards are always a taxable benefit to the employee.”
I have already pointed out that according to the basic definition of a “taxable benefit” that shares and stocks are less qualified than the tax excluded:- “Event Tickets” according to their:- Lack of a “tangible” aspect, Lack of an “Intrinsic” value and lack of holders choice as to when, where and how the shares/stocks may be converted to anything of real value.
So what is the result of this conflict? It adds up to NOTHING MORE OR LESS THAN
A CONTRADICTION OF CLASSIFICATION CRITERIA.
When a dispute arises due to CONTRADICTIONS in document terms, and/or conditions,
an arbitrator -- or other judiciary agent, i.e. Court of Law, -- will study the
document to determine the intent of the author(s) when the terms and conditions were initially compiled, and to resolve the dispute fairly on conclusions reached.
The process is not difficult – so lets have a go at it.
The source document -- of CRA Bulletin T4130 – “Employer’s Guide to “Taxable Benefits” and of CRA Document T4037 – the Capital Gains Guide.-- is the:- Canadian Income Tax Act, (CITA)
This document is passed by Canada’s Parliament, and the senate and signed into law by the queens representative – Canada’s Governor General and the Prime Minister of Canada.
It is implied -- by its title -- the Canadian Income Tax Act, (CITA), is intended to set out the terms and conditions under which the government Tax Administration agency – The Canada Revenue Agency, (CRA), may levy taxes on the “INCOME” of Canadian citizens.
(Not on a pretend potential Income of Canadian citizens.)
Clarification of the base CITA document -- articles, and sub-articles -- is left to the administration agency (CRA) which attempts to make the rules and regulations a bit clearer under a wide range of conditions and circumstances.
They endeavour to do this by way of “Interpretive Documents”, Rulings publications and Guideline documents such as the:- “Employers Guide to Taxable Benefits T4130”.
Even then taxpayers often need to request rulings from the CRA when the published guides e.g. T4130 and Interpretation Bulletin’s and Information Circulars etc. do not provide a clear answer to their specific situation.
Although the CRA may endeavour to correctly interpret the intent of the CITA author’s the interpreters are only human and prone to make errors – the same as everyone else.
The contradiction encountered in Guide T4130 is a prime example of a probable
interpretation error.
So we compare the impact -- and bottom line consequences of allowing both of the possible Classifications of shares/stocks to be assumed to be true – one at a time -- and applying the one classification that offers the most reasonable bottom line result.
(A) Assuming stocks and shares are actually a “Taxable Benefit”.
The bottom line results are:-
(A-1) Taxpayers end up being taxed on money they never actually received.
(A-2) Taxpayers are not treated “Fairly”, or “Equally” under the law.
(A-3) Taxpayers with deferred taxes are penalized if they move out of Canada.
(A-4) Taxpayers who have paid taxes on shares (per a potential but unrealized
profit)are prevented from claiming any part of the taxes paid if the shares
later actually produce a loss.
This situation is a mix of unfair and unreasonable and unwarranted
results.
There are two other legal documents recently passed by parliament, and the senate, and signed into the laws of Canada. Being more recent they should automatically take precedence over prior acts signed into Canadian Law.
The first is “The Canadian Charter of Rights and Freedoms”, (TCCORF) signed into Canadian Law by both the Prime Minister of Canada and the Queen of England, (Canada), personally.
The second is the:- “The Taxpayer Bill of Rights”, (TBOR).
Result (A-1) above is clearly a violation of the Taxpayers right to fair taxation.
Result (A-2) above is a violation of TCCORF article 15(1) and a violation of TBOR article 8.
Result (A-3) above is a violation of TCCORF) article 6(1).
Result (A-4) above is another infringement of TCCORF article 15(1).
It is unreasonable to believe the original authors of the Canadian Income Tax Act intended any of the A-1 to A-4 results to be the outcome when they originally wrote the terms and articles of the
“Income Tax Act".
==============================================
(B) Assuming stocks/shares are not a “Taxable Benefit”
The bottom line results are:-
(B-1) The Taxpayer only pays taxes on money actually received at the time of sale
– and then only if the shares/stocks are sold at a profit,
i.e. “A GENUINE CAPITAL GAIN, (INCOME), IS REALIZED”
(B-2) If the Taxpayer has previously paid taxes on a realized Capital Gain -- and
then suffers a Capital Loss – the loss may be applied to recover Capital
Gains Taxes paid within the prior three years – or carried forward
indefinitely -- to be applied against any future Capital Gains.
Results (B-1), and (B-2) above do not violate any articles of neither the TCCORF nor the TBOR. This interpretation is by far the most fair, reasonable and justified of the two possibilities.
This outcome is far more believable -- as being the intended result -- when the authors originally wrote the terms and articles of the Canadian Income Tax Act.
SUMARRY OF BOTTOM LINE RESULTS:-
When corporate shares or stocks ARE classed as a “Taxable Benefit”:-
Results (A-1) through (A-4) both cheat the Taxpayer and violate articles of a superior Act passed by:- Parliament, and the senate and signed by the Prime Minister of Canada and by the Queen of England (and Canada) personally, i.e. “The Canadian Charter of Rights and Freedoms.”
Article 8 of “The Taxpayers Bill of Rights is also violated.
CLASSIFICATION OF STOCKS AND SHARES AS A TAXABLE BENEFIT HAS ZERO CREDIBILITY
==============================================
When corporate shares or stocks are NOT classed as a “Taxable Benefit”:-
Results (B-1), and (B-2) above do not violate any articles of neither the TCCORF nor the TBOR and therefore provide the best possible bottom line result.
THIS RESULT HAS 100% CREDIBILITY.
It is obvious therefore that the authors of the CITA never intended Corporation shares or stocks -- in general -- to be classed as a “Taxable Benefit” when they created the CITA.
Conclusion:- Stocks/shares neither meet the definition criteria of a “Taxable Benefit” nor the credibility factor and are consequently NOT A TAXABLE BENEFIT.”
Live with this situation – if you can -- If you can not live with Injustice, Unfairness and/or Unequal treatment of your fellow taxpayers then spread the word:-
No public commitment to correct this situation means NO VOTE.
Victor Drummond ©
Wednesday, September 19, 2007
Walking Barefoot
THE BAREFOOT WOMAN
A Commentary on the priority given Canadian Victims
of the defective Taxable Benefits Regulations.
By Victor Drummond ©
There is an old adage that says:- “The only barefoot woman in town is the shoemaker’s wife.”
How do you imagine such a saying came into practice?
Could it be because it is true in many cases?
In the days of the village blacksmith -- and the town cobbler -- do you suppose the cobbler was usually so busy making shoes for other people that his own wife went barefoot?
Or could it be the cobbler held his wife in such low esteem that he wouldn’t bother to make shoes for her?
And do you suppose this state of affairs was so common that the saying became analogous to any circumstance where those persons --most closely associated with those occupied in providing a service to the needs of others – were the most neglected?
Apparently YES – that sounds fairly logical.
For example the following are typical examples of today’s barefoot woman:-
The Electricians wife must usually find and replace the blown fuse, or reset the tripped circuit breaker, herself.
The grocery store manager’s wife must frequently do her own shopping and carry the groceries home herself.
The plumber’s wife usually must use the spray-can of “Liquid Plumber” herself to unplug the Kitchen sink drain.
Then it should come as no surprise that any neglect and/or abuse of Canadian Taxpayers is due to neglect by our own government. Who else would levy “Income Taxes” on money that never was -- and never will be -- received by the taxpayer.
Read the prior article:- “JUSTICE DELAYED” -- for details of this problem.
I wonder if the cobbler’s wife merely accepted that unfair situation back in those days?
Do you suppose she ask for equal treatment and her appeal(s) for shoes -- just fell on deaf ears? Like the today’s Taxable Benefits victims appeals to our current government for justice?
Would today’s woman -- like today’s voting public -- just ignore the situation and put up with this abuse? NOT VERY LIKELY.
Canadian voters – you have the power to make our politicians look after our own tax victims. Kindly recognize your power -- as a voter and use it effectively.
Adopt -- and announce a policy – “NO COMMITMENT TO CORRECT THE DEFECTIVE “Taxable Benefit” legislation – translates into:- “NO VOTE”.
Victor Drummond ©
A Commentary on the priority given Canadian Victims
of the defective Taxable Benefits Regulations.
By Victor Drummond ©
There is an old adage that says:- “The only barefoot woman in town is the shoemaker’s wife.”
How do you imagine such a saying came into practice?
Could it be because it is true in many cases?
In the days of the village blacksmith -- and the town cobbler -- do you suppose the cobbler was usually so busy making shoes for other people that his own wife went barefoot?
Or could it be the cobbler held his wife in such low esteem that he wouldn’t bother to make shoes for her?
And do you suppose this state of affairs was so common that the saying became analogous to any circumstance where those persons --most closely associated with those occupied in providing a service to the needs of others – were the most neglected?
Apparently YES – that sounds fairly logical.
For example the following are typical examples of today’s barefoot woman:-
The Electricians wife must usually find and replace the blown fuse, or reset the tripped circuit breaker, herself.
The grocery store manager’s wife must frequently do her own shopping and carry the groceries home herself.
The plumber’s wife usually must use the spray-can of “Liquid Plumber” herself to unplug the Kitchen sink drain.
Then it should come as no surprise that any neglect and/or abuse of Canadian Taxpayers is due to neglect by our own government. Who else would levy “Income Taxes” on money that never was -- and never will be -- received by the taxpayer.
Read the prior article:- “JUSTICE DELAYED” -- for details of this problem.
I wonder if the cobbler’s wife merely accepted that unfair situation back in those days?
Do you suppose she ask for equal treatment and her appeal(s) for shoes -- just fell on deaf ears? Like the today’s Taxable Benefits victims appeals to our current government for justice?
Would today’s woman -- like today’s voting public -- just ignore the situation and put up with this abuse? NOT VERY LIKELY.
Canadian voters – you have the power to make our politicians look after our own tax victims. Kindly recognize your power -- as a voter and use it effectively.
Adopt -- and announce a policy – “NO COMMITMENT TO CORRECT THE DEFECTIVE “Taxable Benefit” legislation – translates into:- “NO VOTE”.
Victor Drummond ©
Wednesday, September 12, 2007
Justice Delayed
JUSTICE DELAYED
A Commentary on the Injustice imposed
On Victims of the Defective Canadian
“Taxable Benefits” Law.
September 2007
Canada is one of the most highly regarded countries in the world. Our laws and system of applying them “fairly” are almost above reproach.
Canadians are almost assured the highest standards of “Rights and Freedoms” to be found anywhere on this planet.
Nearly every Canadian citizen is protected against unwarranted
Search and seizure:- (From the Canadian Charter of Rights and Freedoms)
Search or seizure 8. Everyone has the right to be secure against unreasonable search or seizure.
This would seem to protect those levied unreasonable taxes against seizure of their property as payment of same.
In fact this clause should be applicable to make Canadians “secure” from unreasonable taxation in the first place. But to the preset time it apparently does not.
It is an almost right to those victimized by the defective “Taxable Benefits” legislation.
The “Injustice” wrought by this legal flaw prompted the Member of Parliament for
the riding of Saanich Gulf Islands, British Columbia, to take action, in 2006, to attempt to correct the problem by having those same taxes imposed on “Profits Never Made” rescinded.
With the knowledge and support of the Canadian Prime Minister, this MP was successful to the point of having said tax rescinded for only some 60+ employees of the JDS Uniphase Corporation in his riding. All other such thousands of identical victimized Canadians were
denied that same justice. Why?
Of course those left out of the “Fair Tax” solution began in November 2006 to appeal to:- (a) their own MP’s .
And (b) to the Office of the Prime Minister of Canada
And (c) to the Office of the Federal Minister of Finance.
And (d) to the Minister of National Revenue – including the very recently appointed Minister of National Revenue.
And (e) to the Office of the Federal Ethics Commissioner – (Federal Accountability Act)
And to every other government agency that might possibly take action to correct the problem.
Every one of the foregoing government persons and associated agencies -- has either ignored the appeals entirely or returned a “boiler plate” reply and passed the message on to another minister for consideration.
There have been no commitments from any government member -- or ministry -- to implement any form of corrective action. And -- (d) has yet to return any reply.
Not one of the above (a) to (e) has, as yet, indicated any intention of taking corrective action. Why do they all ignore this travesty of justice and keep silent or when they do respond they pass the buck?
Yet each and every MP and every member of the Canadian senate has the power to bring forward a members bill to correct the defective “Taxable Benefit” legislation.
The very least that should be done is to declassify stocks, and corporation shares, as a “Taxable Benefit” and reclassify them as “Capital” equities, to bring an end to taxes being levied on non-existent profits, and allow taxpayers to only be taxed on actual “Capital” Gains.
A fair corrective action would also include the remission of all outstanding, (deferred), taxes levied on non-existent profits in the past 20 years – and a refund of taxes previously paid on non-existent profits over this 20 year interval.
This could be accomplished by granting a retroactive 20 year amnesty for victims of the defective “Taxable Benefit” legislation to re-submit their tax returns -- submitted within that time frame -- that reported non-existent profits that rightfully should have been reported as “Capital” Transactions.
The big question is WHY NOT CORRECT THIS PROBLEM? Why are they all giving the remaining Canadian victims the silent treatment? What are they afraid of?
If our current Members of Parliament lack the integrity to acknowledge and commit to correcting this problem then why should anyone vote any of them back into office?
It is not only the present federal government politicians – that are keeping silent on this travesty of justice – none of the federal opposition parties, so far, have dared open their mouths on this issue either.
Why Not? Have they all lowered their standards to a level where they believe such abuse of Canadians is acceptable? If so why should anyone vote any of them into power?
Thousands of Canadians victimized by years of unfair, unjustified and now unequal taxation – have been kept waiting for:- “Justice” which, as yet, hasn’t appeared on any of the Canadian radar screens.
Remember “JUSTICE DELAYED IS JUSTICE DENIED. And Canadians should not tolerate this situation one moment longer -- without raising a very strong public objection.
For starters you can forward this article to your MP and all other Canadians of voting age.
Victor Drummond ©
A Commentary on the Injustice imposed
On Victims of the Defective Canadian
“Taxable Benefits” Law.
September 2007
Canada is one of the most highly regarded countries in the world. Our laws and system of applying them “fairly” are almost above reproach.
Canadians are almost assured the highest standards of “Rights and Freedoms” to be found anywhere on this planet.
Nearly every Canadian citizen is protected against unwarranted
Search and seizure:- (From the Canadian Charter of Rights and Freedoms)
Search or seizure 8. Everyone has the right to be secure against unreasonable search or seizure.
This would seem to protect those levied unreasonable taxes against seizure of their property as payment of same.
In fact this clause should be applicable to make Canadians “secure” from unreasonable taxation in the first place. But to the preset time it apparently does not.
It is an almost right to those victimized by the defective “Taxable Benefits” legislation.
The “Injustice” wrought by this legal flaw prompted the Member of Parliament for
the riding of Saanich Gulf Islands, British Columbia, to take action, in 2006, to attempt to correct the problem by having those same taxes imposed on “Profits Never Made” rescinded.
With the knowledge and support of the Canadian Prime Minister, this MP was successful to the point of having said tax rescinded for only some 60+ employees of the JDS Uniphase Corporation in his riding. All other such thousands of identical victimized Canadians were
denied that same justice. Why?
Of course those left out of the “Fair Tax” solution began in November 2006 to appeal to:- (a) their own MP’s .
And (b) to the Office of the Prime Minister of Canada
And (c) to the Office of the Federal Minister of Finance.
And (d) to the Minister of National Revenue – including the very recently appointed Minister of National Revenue.
And (e) to the Office of the Federal Ethics Commissioner – (Federal Accountability Act)
And to every other government agency that might possibly take action to correct the problem.
Every one of the foregoing government persons and associated agencies -- has either ignored the appeals entirely or returned a “boiler plate” reply and passed the message on to another minister for consideration.
There have been no commitments from any government member -- or ministry -- to implement any form of corrective action. And -- (d) has yet to return any reply.
Not one of the above (a) to (e) has, as yet, indicated any intention of taking corrective action. Why do they all ignore this travesty of justice and keep silent or when they do respond they pass the buck?
Yet each and every MP and every member of the Canadian senate has the power to bring forward a members bill to correct the defective “Taxable Benefit” legislation.
The very least that should be done is to declassify stocks, and corporation shares, as a “Taxable Benefit” and reclassify them as “Capital” equities, to bring an end to taxes being levied on non-existent profits, and allow taxpayers to only be taxed on actual “Capital” Gains.
A fair corrective action would also include the remission of all outstanding, (deferred), taxes levied on non-existent profits in the past 20 years – and a refund of taxes previously paid on non-existent profits over this 20 year interval.
This could be accomplished by granting a retroactive 20 year amnesty for victims of the defective “Taxable Benefit” legislation to re-submit their tax returns -- submitted within that time frame -- that reported non-existent profits that rightfully should have been reported as “Capital” Transactions.
The big question is WHY NOT CORRECT THIS PROBLEM? Why are they all giving the remaining Canadian victims the silent treatment? What are they afraid of?
If our current Members of Parliament lack the integrity to acknowledge and commit to correcting this problem then why should anyone vote any of them back into office?
It is not only the present federal government politicians – that are keeping silent on this travesty of justice – none of the federal opposition parties, so far, have dared open their mouths on this issue either.
Why Not? Have they all lowered their standards to a level where they believe such abuse of Canadians is acceptable? If so why should anyone vote any of them into power?
Thousands of Canadians victimized by years of unfair, unjustified and now unequal taxation – have been kept waiting for:- “Justice” which, as yet, hasn’t appeared on any of the Canadian radar screens.
Remember “JUSTICE DELAYED IS JUSTICE DENIED. And Canadians should not tolerate this situation one moment longer -- without raising a very strong public objection.
For starters you can forward this article to your MP and all other Canadians of voting age.
Victor Drummond ©
Friday, September 7, 2007
Abbott and Costello
ABBOTT AND COSTELLO LOGIC
A commentary on Canada’s Income Tax Act
Taxable Benefit Regulations
By Victor Drummond ©
September 2007
Article withdrawn initially due to technical errors.
Later there was an objection -- to this article -- raised by a victim of the defective "Taxable Benefits" legislation -- who requested it be withdrawn due to possible negative aspects of the comedian theme.
Therefore it will not be re-instated.
Victor
A commentary on Canada’s Income Tax Act
Taxable Benefit Regulations
By Victor Drummond ©
September 2007
Article withdrawn initially due to technical errors.
Later there was an objection -- to this article -- raised by a victim of the defective "Taxable Benefits" legislation -- who requested it be withdrawn due to possible negative aspects of the comedian theme.
Therefore it will not be re-instated.
Victor
Sunday, September 2, 2007
Corporate Shares
CORPORATE SHARES NOT A TAXABLE BENEFIT
By definition per The Canadian Income Tax Act
Taxable Benefits document T4130.
A Report by Victor Drummond ©
September 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 whether or not a significant “CHOICE” is present or absent.
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.”
On examination let us see which conveys the greater versus lesser element of choice when corporate shares are added to the mix.
Your employer gives you the following items at zero cost to you:-
(1) -- A $100 Gift Card/Certificate to a department store chain – such as Wal Mart.
(2) – A pair of tickets to the final game of the NHL Playoffs. (Face Value $200.00)
(3) – 1000 shares in his corporation. (Currently trading at $10.00/share)
Allowing you dare not exercise your choice to refuse any of your employers offers – else you forfeit all future offers – then this does not qualify as a choice.
Choices with gift (1):- ($100 Gift Card/Certificate)
Within the constraints of store locations and operating hours you may go to any one, or more,of the multiple location stores and:-
(1-a) Select from a wide variety of merchandise and use your gift card to take possession of your selection(s). The store clerks and/or managerial staff can not alter the purchasing power of your gift card.
(1-b) Allowing the recent “No Expiry Date” for Gift Cards your Gift Card retains its intrinsic value, i.e. It is valued at $100.00 no matter how long you keep it.
Choices with Gift (2):- $200.00 (Face Value) NHL Playoff Tickets.
(2-a) Attend the game, with or without a companion. (No choice of time or location.)
(2-b) Stay home and try to sell the tickets. If game sold out then tickets may sell for multiples of their face value – a very high probability. If low or no public interest in the final play- off game – a never heard of before prospect -- the tickets may be worthless. (But not very likely.)
(2-c) Give the tickets to someone else.
Choices with Gift (3):- 1000 shares of employer’s stock. Current value $10,000
(3-a) Can only be traded on the listed stock exchange – within the constrains of the stock market trading day and times – No choice of location. Limited choice of time.
(3-b) Shares have no “Face or Tangible Value”. The stockholder has no choice of the value to be received for the shares – this aspect is totally under the control of the bidder.
(3-c) Once taxed illegally -- on a pretend gain re:- the shares held -- to the level where a “Deferred Tax” is in effect THEN the stockholder no longer has even a choice of holding or selling those shares.
So how do the three Employer’s gifts stack up?
(1) Gift Certificate has the most choices and It Has a Guaranteed Tangible value with no time imit
This is a “No Contest” – “$100 Taxable Benefit”
(2) Event Tickets – Have a face value, but No Guarantee of an “Tangible Value” and
No Choice of Time or Location.
Holder may – or may not -- recover any cash for this gift.
This is a “No Contest” – “Not a Taxable Benefit.”
(3) Shares in employers Corporation.
Have * No face Value, and No Guarantee of an “Tangible Value” and holder may
even Have No Choice of when, or where to liquidate the shares.
Holder has no choice of the selling price of the shares.
This item is a “No Contest” – “Not a Taxable Benefit”.
Consequently Canadian Taxpayers have been taxed illegally for years -- on Non-existent “Taxable Benefits”.
* Unless one uses the once-upon-a-time “Par Value $1.00 as a face value that sometimes appeared on stock certificates.
Prove me wrong—if you can.
Victor Drummond ©
By definition per The Canadian Income Tax Act
Taxable Benefits document T4130.
A Report by Victor Drummond ©
September 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 whether or not a significant “CHOICE” is present or absent.
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.”
On examination let us see which conveys the greater versus lesser element of choice when corporate shares are added to the mix.
Your employer gives you the following items at zero cost to you:-
(1) -- A $100 Gift Card/Certificate to a department store chain – such as Wal Mart.
(2) – A pair of tickets to the final game of the NHL Playoffs. (Face Value $200.00)
(3) – 1000 shares in his corporation. (Currently trading at $10.00/share)
Allowing you dare not exercise your choice to refuse any of your employers offers – else you forfeit all future offers – then this does not qualify as a choice.
Choices with gift (1):- ($100 Gift Card/Certificate)
Within the constraints of store locations and operating hours you may go to any one, or more,of the multiple location stores and:-
(1-a) Select from a wide variety of merchandise and use your gift card to take possession of your selection(s). The store clerks and/or managerial staff can not alter the purchasing power of your gift card.
(1-b) Allowing the recent “No Expiry Date” for Gift Cards your Gift Card retains its intrinsic value, i.e. It is valued at $100.00 no matter how long you keep it.
Choices with Gift (2):- $200.00 (Face Value) NHL Playoff Tickets.
(2-a) Attend the game, with or without a companion. (No choice of time or location.)
(2-b) Stay home and try to sell the tickets. If game sold out then tickets may sell for multiples of their face value – a very high probability. If low or no public interest in the final play- off game – a never heard of before prospect -- the tickets may be worthless. (But not very likely.)
(2-c) Give the tickets to someone else.
Choices with Gift (3):- 1000 shares of employer’s stock. Current value $10,000
(3-a) Can only be traded on the listed stock exchange – within the constrains of the stock market trading day and times – No choice of location. Limited choice of time.
(3-b) Shares have no “Face or Tangible Value”. The stockholder has no choice of the value to be received for the shares – this aspect is totally under the control of the bidder.
(3-c) Once taxed illegally -- on a pretend gain re:- the shares held -- to the level where a “Deferred Tax” is in effect THEN the stockholder no longer has even a choice of holding or selling those shares.
So how do the three Employer’s gifts stack up?
(1) Gift Certificate has the most choices and It Has a Guaranteed Tangible value with no time imit
This is a “No Contest” – “$100 Taxable Benefit”
(2) Event Tickets – Have a face value, but No Guarantee of an “Tangible Value” and
No Choice of Time or Location.
Holder may – or may not -- recover any cash for this gift.
This is a “No Contest” – “Not a Taxable Benefit.”
(3) Shares in employers Corporation.
Have * No face Value, and No Guarantee of an “Tangible Value” and holder may
even Have No Choice of when, or where to liquidate the shares.
Holder has no choice of the selling price of the shares.
This item is a “No Contest” – “Not a Taxable Benefit”.
Consequently Canadian Taxpayers have been taxed illegally for years -- on Non-existent “Taxable Benefits”.
* Unless one uses the once-upon-a-time “Par Value $1.00 as a face value that sometimes appeared on stock certificates.
Prove me wrong—if you can.
Victor Drummond ©
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