Thursday, November 29, 2007
Who are the thieves .....
ROBBING HOOD AND HIS MERRY MEN
A commentary on who wears the white hats
In this Fact versus Fiction review
By Victor Drummond ©
November 2007
One of the most popular fiction stories -- when I was quite young – was the tale of
Robin Hood and his merry band of outlaws.
The legends tell of how Robin became a hero to the bullied, abused and over-taxed peasants in the Nottingham, Barnsdale and Sherwood areas of England – back in the days of the evil King John.
As I recall the movie version -- of the story, starring Errol Flynn -- Robin becomes an outlaw leader after his father was killed by an envious and treacherous competitor -- whom Robin had recently defeated -- in an archery contest.
Robin was the next intended victim -- of the assassin -- but was faster and more accurate in his archery skills so he killed his attacker in self defence.
Robin, however was not about to plead his case before the unscrupulous sheriff of Nottingham or appeal his case to be tried before the upper courts of the evil King John.
Consequently he hid out in Sherwood forests where he eventually collected a small army of similar outlaws. Folklore makes a hero of Robin Hood -- and his gang -- for standing up to the unfair, and unjust establishment.
The majority of the population even approves of his practice of holding up rich travellers who have had the misfortune to be using the paths through the Sherwood forests on their journey(s).
This general approval may have been short lived had Robin not shared his loot with the victimized local citizens.
A somewhat unorthodox corrective action to the unfair tax legislation of the time.
So who gets to be the good guys in this situation and wear the white hats?
It all depends upon who you ask.
A democratic poll would give the white hats to Robin Hood and his gang of happy outlaws.
An opinion poll of the establishment would give the white hats to the Sheriff of Nottingham and his supporters. After all they are trying to uphold the law – such as it is -- one way or another.
Their situation is not a whole lot different than the circumstances associated with the defective taxable benefit legislation that gives our current establishment power to extort
“Income” tax from Canadian citizens on non-existent income.
This must be one law left over from the days of unscrupulous King Jean.
In any event the white hats do not go to the establishment in this case.
So far there hasn’t been a Robin Hood -- show up with his merry men -- to correct the defective unfair taxable benefit legislation.
Although the present establishment appears to be trying. (See prior postings:- “Could anyone want for more” and “Please sir..”)
Whoever initiates real action to properly fix this unfair legislation – gets to wear the white hats in this instance.
Save your vote -- in the coming federal election -- for the party wearing the white hats.
Victor Drummond ©
Sunday, November 25, 2007
Mr Fixit.....
DOING THE JOB RIGHT
A commentary on the 2007 Fair Taxation Pledge
Promising “Fair Taxation to All Canadians”
By Victor Drummond ©
November 2007
There are a number of adages that address the right versus wrong way to fix a problem, i.e.:-
(a) Do the job right or don’t do it at all,
(b) Let someone do the job that knows how.
(c) Don’t start something you can’t finish.
(d) A job half done is not done at all.
(e) A job done by halves is never finished.
To name a few.
For anyone old enough to remember when automobile tires were not air tight, (tubeless), and they required a thin walled rubber inner tube to maintain -- the necessary -- air pressure in the tire -- therein is a perfect analogy to illustrate the wisdom of the above sayings.
The greatest hazard to those tires was the pick-up of a nail in the tread of the tire – which would penetrate the tire casing and puncture the inner tube.
When that happened the tire would go flat and had to be removed from the rim. Then a sealing rubber patch had to be applied to the inner tube. Then the nail -- in the tire -- had to be found and removed or the tube repair would be futile.
Sometimes the offending nail was short and barely broke through the inner belting of the tire.
In really difficult situations the nail could not be seen from the outside of the tire or felt by running one’s fingers around the inside of the tire.
When the cause of the puncture could not be easily found there was always a great temptation to assume the cause of the puncture was no longer present and to put the repaired tube and tire back on the rim – inflate to the correct pressure and resume driving.
If the item that had caused the original puncture was still operative it would not be long before the tire went flat again.
A tack with the head worn off and which only reached the surface of the inner tube when the weight of the car was pressing down on the tack shaft would take some time to puncture the tube – but if the car were driven under this condition -- a puncture would inevitably recur before long.
If the original cause of the problem was not found and corrected – the job was not done right – and the situation could then become much more dangerous than not attempting to do the job in the first place.
This is a perfect example for comparison to the current government’s overtures to the voting public on the basis of their commitments to provide all Canadians with “Fair Taxation”.
Promises to provide every Canadian with Fair Taxation – without restoring the RIGHT of every Canadian to Fair Taxation -- is the equivalent of patching the inner tube without removing the cause of the puncture.
By granting some individual taxpayers’ remission of unjust taxes – without restoring the RIGHT of every Canadian to Fair Taxation -- is the equivalent leaving the puncturing agent still imbedded in the tire tread.
You may go another few miles with that repair but it will inevitably leave you stranded with another flat tire.
If our current leaders are not able and/or willing to do the job right – then they should admit their inadequacies and leave the job to someone who has the moxie, the integrity, the ability and the determination to do the job right.
If any of our wannabe Prime Ministers will commit to correcting the defective taxable benefit legislation – Will they Please Stand up to be counted?
There are thousands of victimized – honest, hard-working Canadian Taxpayers lining up to vote for you.
Keep in mind when the next Federal Election is called – has anyone committed to doing this job right.
We do not need another round of flat tires, i.e. another round of Canadian Taxpayers Legally Robbed.
Victor Drummond ©
A commentary on the 2007 Fair Taxation Pledge
Promising “Fair Taxation to All Canadians”
By Victor Drummond ©
November 2007
There are a number of adages that address the right versus wrong way to fix a problem, i.e.:-
(a) Do the job right or don’t do it at all,
(b) Let someone do the job that knows how.
(c) Don’t start something you can’t finish.
(d) A job half done is not done at all.
(e) A job done by halves is never finished.
To name a few.
For anyone old enough to remember when automobile tires were not air tight, (tubeless), and they required a thin walled rubber inner tube to maintain -- the necessary -- air pressure in the tire -- therein is a perfect analogy to illustrate the wisdom of the above sayings.
The greatest hazard to those tires was the pick-up of a nail in the tread of the tire – which would penetrate the tire casing and puncture the inner tube.
When that happened the tire would go flat and had to be removed from the rim. Then a sealing rubber patch had to be applied to the inner tube. Then the nail -- in the tire -- had to be found and removed or the tube repair would be futile.
Sometimes the offending nail was short and barely broke through the inner belting of the tire.
In really difficult situations the nail could not be seen from the outside of the tire or felt by running one’s fingers around the inside of the tire.
When the cause of the puncture could not be easily found there was always a great temptation to assume the cause of the puncture was no longer present and to put the repaired tube and tire back on the rim – inflate to the correct pressure and resume driving.
If the item that had caused the original puncture was still operative it would not be long before the tire went flat again.
A tack with the head worn off and which only reached the surface of the inner tube when the weight of the car was pressing down on the tack shaft would take some time to puncture the tube – but if the car were driven under this condition -- a puncture would inevitably recur before long.
If the original cause of the problem was not found and corrected – the job was not done right – and the situation could then become much more dangerous than not attempting to do the job in the first place.
This is a perfect example for comparison to the current government’s overtures to the voting public on the basis of their commitments to provide all Canadians with “Fair Taxation”.
Promises to provide every Canadian with Fair Taxation – without restoring the RIGHT of every Canadian to Fair Taxation -- is the equivalent of patching the inner tube without removing the cause of the puncture.
By granting some individual taxpayers’ remission of unjust taxes – without restoring the RIGHT of every Canadian to Fair Taxation -- is the equivalent leaving the puncturing agent still imbedded in the tire tread.
You may go another few miles with that repair but it will inevitably leave you stranded with another flat tire.
If our current leaders are not able and/or willing to do the job right – then they should admit their inadequacies and leave the job to someone who has the moxie, the integrity, the ability and the determination to do the job right.
If any of our wannabe Prime Ministers will commit to correcting the defective taxable benefit legislation – Will they Please Stand up to be counted?
There are thousands of victimized – honest, hard-working Canadian Taxpayers lining up to vote for you.
Keep in mind when the next Federal Election is called – has anyone committed to doing this job right.
We do not need another round of flat tires, i.e. another round of Canadian Taxpayers Legally Robbed.
Victor Drummond ©
Wednesday, November 21, 2007
Dan do you see that big green Tree....
FAIR TAXATION – REALITY OR MIRAGE
A Commentary on Current Events related to the Prospect Canadian Victims
Of taxation on Fictitious Income will ever actually realize
“Truly Fair” -- Income Taxation.
By Victor Drummond ©
November 2007
Ocean going sailors and travellers -- crossing the great deserts of this world -- are familiar with a natural phenomenon whereby objects that are hundreds of miles away appear to be nearby.
These -- visually near but actually far distant -- objects are actually real – but not anywhere close to where they appear to be.
They are not hallucinations. But if the observer attempts to move towards the image they see -- it will disappear without a trace.
Pledges and promises made by governments -- and/or politicians -- often do the same thing.
Canadian taxpayers, who were levied taxes on non-existent “Earned Incomes”, have been plodding along -- for the past eight years in a quagmire worse than walking on the shifting sands of any desert – looking for the fair and equal taxation that are rightfully theirs.
In the years from 1999 through 2005 – under the previous regime – there wasn’t a ghost of a chance of actually achieving that right. There were no visual images – real or imaginary – to guide or encourage those weary taxpayers. The defective taxable benefit legislation – that legalized their robbery in the first place – was staunchly defended by the Cretien and Martin governments.
With the change of government -- that took place in 2006 -- a young conservative MP, representing the riding of:- Saanich, Gulf Islands in British Columbia, -- The truly Honourable Gary Lunn – submitted a request -- for a remission order of those unfair taxes.
This appeal eventually found approval by her Excellency the Right Honourable Michaelle Jean – Canada’s Governor General.
According to the sketchy information provided -- about this tax remission order – in the Canada Gazette issue of November 14, 2007 – this document arrived at the governor generals office with the endorsement of Canada’s National Minister of Revenue – the Honourable Carol Skelton.
The Canada Gazette article did not comment on the legality of the remission order after it was approved by her Excellency the Governor General for Canada.
Is Royal Approval -- without the passage of the order by the House of Commons – and/or the approval of the Prime Minister – and/or the passage by Canada’s Senate – sufficient to give the order the force of law?
The Canada Gazette article makes no mention of these other approvals being required or received.
Perhaps that is the reason that one source stated – a few weeks ago – the JDS Employee’s tax remission order was still before the courts.
Also stated – not long ago – this remission order only applied to those JDS Corporation employees in British Columbia -- who were named in the order – and to no one else.
How is that for “Fair and Equal” tax treatment for all Canadians?
Now this conundrum raises a few important questions, i.e.
(1) If the Remission Order – already given Royal Assent – is not bona fide without additional approvals then it is subject to a review by those who must give approval – and it may – like a mirage – just disappear. Is it now Law or Not?
(2) If the Remission Order has the force of law -- with the approvals it already has -- then there is a Basis for demanding equal treatment under the law -- as provided by the Canadian Charter of Rights and Freedoms article 15(1) and also by the updated Taxpayers Charter Article (8).
There is also a basis for accepting the provision of the Pledge of Fair Taxation -- to give every person who appeals their tax assessment -- a clear and plain explanation of the amended legislation that now relieves them of those ridiculous taxes on their 1999 and 2000 non-existent "Earned Income”.
This would also give some substance to the 2007 pledge of “Fair Taxation” for all Canadians.
(3) If the current government wished to restore the RIGHT of all Canadians to truly “REAL” Fair Taxation they would amend the defective taxable benefit legislation to remove corporation/company shares from the taxable benefits classification.
This would eliminate the REAL possibility that a promise of “Fair Taxation” for all Canadians might disappear -- like a mirage – at the whim of some court judge or appeals officer.
Think about this situation when invited to vote for someone in the next Federal Election.
Do you want to be controlled and represented by MIRAGE makers.
Victor Drummond ©
A Commentary on Current Events related to the Prospect Canadian Victims
Of taxation on Fictitious Income will ever actually realize
“Truly Fair” -- Income Taxation.
By Victor Drummond ©
November 2007
Ocean going sailors and travellers -- crossing the great deserts of this world -- are familiar with a natural phenomenon whereby objects that are hundreds of miles away appear to be nearby.
These -- visually near but actually far distant -- objects are actually real – but not anywhere close to where they appear to be.
They are not hallucinations. But if the observer attempts to move towards the image they see -- it will disappear without a trace.
Pledges and promises made by governments -- and/or politicians -- often do the same thing.
Canadian taxpayers, who were levied taxes on non-existent “Earned Incomes”, have been plodding along -- for the past eight years in a quagmire worse than walking on the shifting sands of any desert – looking for the fair and equal taxation that are rightfully theirs.
In the years from 1999 through 2005 – under the previous regime – there wasn’t a ghost of a chance of actually achieving that right. There were no visual images – real or imaginary – to guide or encourage those weary taxpayers. The defective taxable benefit legislation – that legalized their robbery in the first place – was staunchly defended by the Cretien and Martin governments.
With the change of government -- that took place in 2006 -- a young conservative MP, representing the riding of:- Saanich, Gulf Islands in British Columbia, -- The truly Honourable Gary Lunn – submitted a request -- for a remission order of those unfair taxes.
This appeal eventually found approval by her Excellency the Right Honourable Michaelle Jean – Canada’s Governor General.
According to the sketchy information provided -- about this tax remission order – in the Canada Gazette issue of November 14, 2007 – this document arrived at the governor generals office with the endorsement of Canada’s National Minister of Revenue – the Honourable Carol Skelton.
The Canada Gazette article did not comment on the legality of the remission order after it was approved by her Excellency the Governor General for Canada.
Is Royal Approval -- without the passage of the order by the House of Commons – and/or the approval of the Prime Minister – and/or the passage by Canada’s Senate – sufficient to give the order the force of law?
The Canada Gazette article makes no mention of these other approvals being required or received.
Perhaps that is the reason that one source stated – a few weeks ago – the JDS Employee’s tax remission order was still before the courts.
Also stated – not long ago – this remission order only applied to those JDS Corporation employees in British Columbia -- who were named in the order – and to no one else.
How is that for “Fair and Equal” tax treatment for all Canadians?
Now this conundrum raises a few important questions, i.e.
(1) If the Remission Order – already given Royal Assent – is not bona fide without additional approvals then it is subject to a review by those who must give approval – and it may – like a mirage – just disappear. Is it now Law or Not?
(2) If the Remission Order has the force of law -- with the approvals it already has -- then there is a Basis for demanding equal treatment under the law -- as provided by the Canadian Charter of Rights and Freedoms article 15(1) and also by the updated Taxpayers Charter Article (8).
There is also a basis for accepting the provision of the Pledge of Fair Taxation -- to give every person who appeals their tax assessment -- a clear and plain explanation of the amended legislation that now relieves them of those ridiculous taxes on their 1999 and 2000 non-existent "Earned Income”.
This would also give some substance to the 2007 pledge of “Fair Taxation” for all Canadians.
(3) If the current government wished to restore the RIGHT of all Canadians to truly “REAL” Fair Taxation they would amend the defective taxable benefit legislation to remove corporation/company shares from the taxable benefits classification.
This would eliminate the REAL possibility that a promise of “Fair Taxation” for all Canadians might disappear -- like a mirage – at the whim of some court judge or appeals officer.
Think about this situation when invited to vote for someone in the next Federal Election.
Do you want to be controlled and represented by MIRAGE makers.
Victor Drummond ©
Sunday, November 18, 2007
The JDS Employee's Tax Remission Order..
THE JDS EMPLOYEES TAXABLE BENEFIT
REMISSION ORDER – OUTLINE
What does this outline say?
What does the Whole Text of the Remission Order Mean?
A Commentary and Conjecture by Victor Drummond ©
November 2007
Below is a copy of the Taxable Benefit tax remission order as reported in the Canada Gazette on November 14th 2007. The description provided in the Gazette is sketchy and
leaves plenty of room for miss-interpretation by anyone less than a professional Income Tax Specialist.
DISCLAIMER
As your’s truly is not such a specialist kindly observe this disclaimer, i.e. that the interpretation given here is purely logical speculation and not necessarily a true statement of the real meaning of the subject Tax Remission Order.
Logical Assumption No. (1). (Rationale)
The Conservative Member of Parliament for the riding of Saanich, Gulf Islands, i.e.
The Honourable Gary Lunn -- is a tax professional and it is logical to assume that he drafted the original tax remission order specifically for the victims of the tax on potential income in his riding.
More specifically those persons formerly employed by the JDS Uniphase Corporation who acquired their employers shares via an Employee Shares Purchase Plan, (ESPP).
Mr. Lunn may, or may not, have been aware of the tens of thousands of other similar taxpayers – right across Canada -- who were unjustly taxed in exactly the same way.
From the way the remission order is worded I suspect he wasn’t aware of the scope of the problem. For if he was – then it would be logical to assume the tax remission order would not be worded for specific persons – even if they had could have hired him, as a group, to represent them.
Conclusion (1):- The Tax remission order was unintentionally written as to be to be totally unfair to all other Canadian Taxpayers who had been victimized the same
way via the same defective Tax legislation.
The remission order therefore – accidentally – became a violation of the Canadian
Charter of Rights and Freedoms Article 15(1) and the later updated Taxpayers Bill
of Rights Article 8.
Logical Assumption No. (2). (Rationale)
The Honourable Minister of National Revenue, Ms. Carol Skelton, (at that time), endorsed the remission order prepared by MP G. Lunn. The Honourable Ms. Skelton was likely also unaware of the scope of the problem at that time.
The endorsed document was then approved by the Right Honourable Michaelle Jean, Governor General of Canada which then became a codicil of Canada’s Income Tax Act. It is also highly doubtful that Her Excellency had any concept of the scope of the problem – but was well aware that the taxation of fictitious income was unjust, unfair, and not in the government’s or the public’s best interest.
Conclusion (2):- The tax remission order – that brought some semblance of “Fair Taxation” to those JDS Uniphase employee’s -- named in the order – actually became an amendment to the defective taxable benefits legislation more by accident than intent.
This conclusion is also strongly supported by the behaviour of the Conservative MP’s, -- including the PM and Minister’s of National Finance and National Revenue – all of who declined to acknowledge any and all appeals for details of the tax remission order – or in many cases to even admit it existed.
Logical Assumption (3), (Rationale)
From the sketchy details of the actual remission order it appears to operate in the following way:- Until the tech market correction -- that began in July of the year 2000 – Canadians who acquired employer’s shares -- via an ESPP, or Employer Shares Option (ESO) plans were exposed to being taxed on fictitious “Earned Income” just like the JDS Employees in British Columbia.
Although grossly unfair this policy did not produce wholesale hardship as long as the corporation shares kept rising in value. When the market correction hit – in mid-July of the year 2000 -- thousands of taxpayers found themselves levied with huge taxes on prodigious non-existent taxable benefits that were added to their Income Tax T4 documents. And thereby also reported to the Canada Revenue Agency – by the employer -- as “Earned Income”
Remission of taxes levied -- on the non-existent “Earned Income” -- can be achieved by cancelling the reported “taxable benefit” amount that was produced by the assumed “Fair Market Value”, (FMV) of all shares delivered, (exercised), to the employee in the years 1999 and 2000.
By allowing these taxpayers to report all ESPP/ESO shares exercised and/or liquidated in year 1999 and/or 2000 as being valued at the essentially zero value level they had -- as of December 29th in the year 2006 -- the inflated FMV they were initially taxed at in 1999 and/or 2000 is effectively wiped out.
Conclusion (3):- The $ numbers in Column 2 -- of Schedule 2 & 3 below -- I conclude – Is the “Taxable Benefit” amount produced by the FMV of the shares
Exercised by the employee named in column 1 and reported to the CRA,
by the employer as “Earned Income”.
(Some Employee names appear twice in column 1. It appears logical one
appearance is for a 1999 reported taxable benefit – and a second
appearance is for a year 2000 taxable benefit.)
By cancelling these reported taxable benefit amounts -- adjusted for the
persons base tax percent and the year(s) inclusion rate -- the excess taxes
are effectively removed.
Logical Assumption (4), (Rationale)
By allowing the taxpayer to declare their ESPP/ESO shares transactions for the year(s) 1999 and/or 2000 -- at the share value as of December 29th 2006 -- then every one of those taxpayers will be declaring a huge loss on their shares disposition.
As the original taxable benefits legislation blocked the application of “Capital Losses” against prior/succeeding taxes on those same shares when taxed as a “taxable benefit” a similar block is incorporated in this tax remission order.
Conclusion (4):-
The move towards truly fair taxation -- per the JDS tax remission order – falls a long way short of being 100% fair.
A real “Fair Taxation Policy” would be to correct the defective taxable benefit legislation to exclude intangible items -- such as volatile company stocks and corporation shares – from the taxable benefit classification altogether. These items are NOT NEAR CASH ITEMS and they have NO TANGIBLE QUALITIES. They can not be exchanged at a face value – as they have no FACE VALUE.
The government would still get all the revenue they are justly entitled to via the “Capital Gains” tax legislation – which at least can be applied uniformly.
How anyone can put any confidence, whatsoever, in a political organization -- that is claiming to provide “Fair Taxation” to all Canadians but allows the taxable benefits legislation to remain with a flaw that produces this bungled result – is way beyond me.
As it stands this defective taxable benefit legislation denies taxpayers their RIGHT to fair taxation – so it is therefore impossible to assure “All Canadians” will receive “Fair Taxation” no matter how many promises or pledges are announced – as long as this legislation continues in force.
A half a loaf is better than none – however – so let’s use the leverage we have to bring about as fair a tax result as these tools will allow us.
The 2007 updated “Fair Taxation Pledge” -- and related documents – are provide for dissatisfied Canadian Taxpayers to utilize one of the methods for asking the government to review their tax situation and grant them the same consideration as was given to the JDS Employees in Gary Lunn’s riding. See:- www.cra.gc.ca/fairness and/or read the prior posted article:- “Could Anyone Want for More”
I am advising the taxable benefit victim in my family -- to do the following:-
Call the government’s hand on this issue – and (b) to see just how quickly and how fairly they will treat his application, i.e. Complete and submit Form RC4288-e – Request for Taxpayer Relief.
This appears to be the form best suited to listing distant past. (more than 3 years), unjust taxation situations – and provides places to describe events that justify a tax review and tax remission -- at least equal to the deal provide to the JDS Employees of British Columbia.
If our governments word -- to provide “All Canadians Fair Taxation” according to their 2007 pledge and recent public announcements – is worth the time it takes to listen to them –
then every such taxable benefits victim -- who submits a similar request -- must receive equivalent remission of their unfair taxation as well.
The Canada Gazette report is displayed below.
Leave a comment if you have an opinion on this article and/or this issue.
Victor Drummond ©
===============================================
THE CANADA GAZETTE
Vol. 141, No. 23 — November 14, 2007
Registration
SI/2007-99 November 14, 2007
FINANCIAL ADMINISTRATION ACT
Certain Former Employees of SDL Optics, Inc. Remission Order
P.C. 2007-1635 October 25, 2007
Her Excellency the Governor General in Council, considering that it is in the public interest to do so, on the recommendation of the Minister of National Revenue, pursuant to subsection 23(2) (see footnote a) of the Financial Administration Act, hereby makes the annexed Certain Former Employees of SDL Optics, Inc. Remission Order.
CERTAIN FORMER EMPLOYEES OF SDL OPTICS, INC. REMISSION ORDER
INTERPRETATION
1. In this Order, "employment benefit" means a benefit under subsection 7(1) of the Income Tax Act in respect of the acquisition of shares, in 1999 and 2000, through the stock purchase plan for employees of SDL Optics, Inc.
REMISSION
2. Remission is granted to the taxpayers set out in column 1 of the schedule for the amount set out in column 2, in respect of the 1999 or 2000 taxation years, as the case may be, which represents,
(a) for those taxpayers set out in items 1 to 21 of the schedule, all or a portion of tax paid or payable under Part I of the Income Tax Act in respect of an employment benefit; or
(b) for those taxpayers set out in items 22 to 42 of the schedule, all or a portion of interest paid or payable under Part I of that Act, on tax paid or payable under that Part in respect of an employment benefit.
CONDITIONS
3. The remission set out in paragraph 2(a) is granted with one of the following conditions:
(a) in respect of those taxpayers set out in items 1, 4 to 11, 13, 15, and 17 to 19 of the schedule, that the taxpayer agrees to reduce the adjusted cost base of any shares held at the close of the stock markets on December 29, 2006 that were, or are identical to those, purshased in 1999 or 2000 through the stock purchase plan for employees of SDL Optics, Inc. by the amount set out in column 2 of the schedule, divided be the taxpayer's effective federal tax rate on the employment benefit; and
(b) in respect of those taxpayers set out in item 2, 3, 12, 14, 20 and 21 of the schedule, that the taxpayer agrees not to claim a deduction in respect of net capital losses, equal to one-half the amount set out in column 2 of the schedule, divided by the taxpayer's effective federal tax rate on the employment benefit.
SCHEDULE
(Sections 2 and 3)
Item Column 1
Taxpayer Column 2
Amount ($)
1. Sheri Colwell 1,430.92
2. Timothy Couch 6,551.90
3. Grant Coulombe 7,261.63
4. Rhonda Fleming 10,753.70
5. Vicki Harris 15,868.95
6. Hanna Kowalski 3,563.23
7. John Lauder 734.62
8. Howard Lo 14,285.42
9. Timothy Ying Tai Lo 30,675.50
10. Laura Meyer 134,847.28
11. Christie Michaud 2,587.67
12. Christine Mollerud 183,371.94
13. Anthony Ong 14,247.68
14. Mark Ord 2,718.19
15. Dennis Rasmussen 3,975.60
16. Dean Rheault 4,038.83
17. Cornelis Scheffer 672.63
18. Pamela Shwab 183.47
19. Peter Stern 5,945.87
20. Penny Taylor 20,202.28
21. Sandra Woodward 2,641.04
22. Victoria Barter 14,589.26
23. Allan Baxter 3,451.66
24. David Bengston 441.50
25. David Benson 860.22
26. Shannon Campbell 3,390.45
27. Timothy Couch 1,679.34
28. Grant Coulombe 2,733.15
29. Gloria Davenport 21,102.90
30. Connie Gethings 479.08
31. Don Hargreaves 12,706.01
32. Howard Lo 1,003.51
33. Laura Meyer 52,089.41
34. Tracy Mills 47,108.37
35. Christine Mollerud 179,260.64
36. Carina Paredes 3,287.87
37. Martha Perdomo 543.98
38. Dean Rheault 1,584.06
39. Penny Taylor 28.91
40. Richard Van Acken 51.82
41. Joseph Wood 14,330.76
42. Sandra Woodward 3.30
EXPLANATORY NOTE
(This note is not part of the Order.)
The Order remits all or a portion of federal income tax paid or payable in respect of the 1999 or 2000 taxation years, as the case may be, by certain former employees of SDL Optics, Inc. Those individuals qualify for tax remission if the tax assessed on the employment benefit associated with shares acquired in 1999 or 2000 through the stock purchase plan for employees of SDL Optics, Inc. exceeds the total of the proceeds of disposition realized on the disposition of those shares and the market value of any of those shares held at the close of stock markets on December 29, 2006. The amount remitted is subject to certain conditions and adjustments.
The Order also remits, to certain former employees of SDL Optics, Inc., all or a portion of interest paid or payable on tax paid or payable on an employment benefit in respect of shares acquired in 1999 or 2000 through the stock purchase plan for employees of SDL Optics, Inc.
REMISSION ORDER – OUTLINE
What does this outline say?
What does the Whole Text of the Remission Order Mean?
A Commentary and Conjecture by Victor Drummond ©
November 2007
Below is a copy of the Taxable Benefit tax remission order as reported in the Canada Gazette on November 14th 2007. The description provided in the Gazette is sketchy and
leaves plenty of room for miss-interpretation by anyone less than a professional Income Tax Specialist.
DISCLAIMER
As your’s truly is not such a specialist kindly observe this disclaimer, i.e. that the interpretation given here is purely logical speculation and not necessarily a true statement of the real meaning of the subject Tax Remission Order.
Logical Assumption No. (1). (Rationale)
The Conservative Member of Parliament for the riding of Saanich, Gulf Islands, i.e.
The Honourable Gary Lunn -- is a tax professional and it is logical to assume that he drafted the original tax remission order specifically for the victims of the tax on potential income in his riding.
More specifically those persons formerly employed by the JDS Uniphase Corporation who acquired their employers shares via an Employee Shares Purchase Plan, (ESPP).
Mr. Lunn may, or may not, have been aware of the tens of thousands of other similar taxpayers – right across Canada -- who were unjustly taxed in exactly the same way.
From the way the remission order is worded I suspect he wasn’t aware of the scope of the problem. For if he was – then it would be logical to assume the tax remission order would not be worded for specific persons – even if they had could have hired him, as a group, to represent them.
Conclusion (1):- The Tax remission order was unintentionally written as to be to be totally unfair to all other Canadian Taxpayers who had been victimized the same
way via the same defective Tax legislation.
The remission order therefore – accidentally – became a violation of the Canadian
Charter of Rights and Freedoms Article 15(1) and the later updated Taxpayers Bill
of Rights Article 8.
Logical Assumption No. (2). (Rationale)
The Honourable Minister of National Revenue, Ms. Carol Skelton, (at that time), endorsed the remission order prepared by MP G. Lunn. The Honourable Ms. Skelton was likely also unaware of the scope of the problem at that time.
The endorsed document was then approved by the Right Honourable Michaelle Jean, Governor General of Canada which then became a codicil of Canada’s Income Tax Act. It is also highly doubtful that Her Excellency had any concept of the scope of the problem – but was well aware that the taxation of fictitious income was unjust, unfair, and not in the government’s or the public’s best interest.
Conclusion (2):- The tax remission order – that brought some semblance of “Fair Taxation” to those JDS Uniphase employee’s -- named in the order – actually became an amendment to the defective taxable benefits legislation more by accident than intent.
This conclusion is also strongly supported by the behaviour of the Conservative MP’s, -- including the PM and Minister’s of National Finance and National Revenue – all of who declined to acknowledge any and all appeals for details of the tax remission order – or in many cases to even admit it existed.
Logical Assumption (3), (Rationale)
From the sketchy details of the actual remission order it appears to operate in the following way:- Until the tech market correction -- that began in July of the year 2000 – Canadians who acquired employer’s shares -- via an ESPP, or Employer Shares Option (ESO) plans were exposed to being taxed on fictitious “Earned Income” just like the JDS Employees in British Columbia.
Although grossly unfair this policy did not produce wholesale hardship as long as the corporation shares kept rising in value. When the market correction hit – in mid-July of the year 2000 -- thousands of taxpayers found themselves levied with huge taxes on prodigious non-existent taxable benefits that were added to their Income Tax T4 documents. And thereby also reported to the Canada Revenue Agency – by the employer -- as “Earned Income”
Remission of taxes levied -- on the non-existent “Earned Income” -- can be achieved by cancelling the reported “taxable benefit” amount that was produced by the assumed “Fair Market Value”, (FMV) of all shares delivered, (exercised), to the employee in the years 1999 and 2000.
By allowing these taxpayers to report all ESPP/ESO shares exercised and/or liquidated in year 1999 and/or 2000 as being valued at the essentially zero value level they had -- as of December 29th in the year 2006 -- the inflated FMV they were initially taxed at in 1999 and/or 2000 is effectively wiped out.
Conclusion (3):- The $ numbers in Column 2 -- of Schedule 2 & 3 below -- I conclude – Is the “Taxable Benefit” amount produced by the FMV of the shares
Exercised by the employee named in column 1 and reported to the CRA,
by the employer as “Earned Income”.
(Some Employee names appear twice in column 1. It appears logical one
appearance is for a 1999 reported taxable benefit – and a second
appearance is for a year 2000 taxable benefit.)
By cancelling these reported taxable benefit amounts -- adjusted for the
persons base tax percent and the year(s) inclusion rate -- the excess taxes
are effectively removed.
Logical Assumption (4), (Rationale)
By allowing the taxpayer to declare their ESPP/ESO shares transactions for the year(s) 1999 and/or 2000 -- at the share value as of December 29th 2006 -- then every one of those taxpayers will be declaring a huge loss on their shares disposition.
As the original taxable benefits legislation blocked the application of “Capital Losses” against prior/succeeding taxes on those same shares when taxed as a “taxable benefit” a similar block is incorporated in this tax remission order.
Conclusion (4):-
The move towards truly fair taxation -- per the JDS tax remission order – falls a long way short of being 100% fair.
A real “Fair Taxation Policy” would be to correct the defective taxable benefit legislation to exclude intangible items -- such as volatile company stocks and corporation shares – from the taxable benefit classification altogether. These items are NOT NEAR CASH ITEMS and they have NO TANGIBLE QUALITIES. They can not be exchanged at a face value – as they have no FACE VALUE.
The government would still get all the revenue they are justly entitled to via the “Capital Gains” tax legislation – which at least can be applied uniformly.
How anyone can put any confidence, whatsoever, in a political organization -- that is claiming to provide “Fair Taxation” to all Canadians but allows the taxable benefits legislation to remain with a flaw that produces this bungled result – is way beyond me.
As it stands this defective taxable benefit legislation denies taxpayers their RIGHT to fair taxation – so it is therefore impossible to assure “All Canadians” will receive “Fair Taxation” no matter how many promises or pledges are announced – as long as this legislation continues in force.
A half a loaf is better than none – however – so let’s use the leverage we have to bring about as fair a tax result as these tools will allow us.
The 2007 updated “Fair Taxation Pledge” -- and related documents – are provide for dissatisfied Canadian Taxpayers to utilize one of the methods for asking the government to review their tax situation and grant them the same consideration as was given to the JDS Employees in Gary Lunn’s riding. See:- www.cra.gc.ca/fairness and/or read the prior posted article:- “Could Anyone Want for More”
I am advising the taxable benefit victim in my family -- to do the following:-
Call the government’s hand on this issue – and (b) to see just how quickly and how fairly they will treat his application, i.e. Complete and submit Form RC4288-e – Request for Taxpayer Relief.
This appears to be the form best suited to listing distant past. (more than 3 years), unjust taxation situations – and provides places to describe events that justify a tax review and tax remission -- at least equal to the deal provide to the JDS Employees of British Columbia.
If our governments word -- to provide “All Canadians Fair Taxation” according to their 2007 pledge and recent public announcements – is worth the time it takes to listen to them –
then every such taxable benefits victim -- who submits a similar request -- must receive equivalent remission of their unfair taxation as well.
The Canada Gazette report is displayed below.
Leave a comment if you have an opinion on this article and/or this issue.
Victor Drummond ©
===============================================
THE CANADA GAZETTE
Vol. 141, No. 23 — November 14, 2007
Registration
SI/2007-99 November 14, 2007
FINANCIAL ADMINISTRATION ACT
Certain Former Employees of SDL Optics, Inc. Remission Order
P.C. 2007-1635 October 25, 2007
Her Excellency the Governor General in Council, considering that it is in the public interest to do so, on the recommendation of the Minister of National Revenue, pursuant to subsection 23(2) (see footnote a) of the Financial Administration Act, hereby makes the annexed Certain Former Employees of SDL Optics, Inc. Remission Order.
CERTAIN FORMER EMPLOYEES OF SDL OPTICS, INC. REMISSION ORDER
INTERPRETATION
1. In this Order, "employment benefit" means a benefit under subsection 7(1) of the Income Tax Act in respect of the acquisition of shares, in 1999 and 2000, through the stock purchase plan for employees of SDL Optics, Inc.
REMISSION
2. Remission is granted to the taxpayers set out in column 1 of the schedule for the amount set out in column 2, in respect of the 1999 or 2000 taxation years, as the case may be, which represents,
(a) for those taxpayers set out in items 1 to 21 of the schedule, all or a portion of tax paid or payable under Part I of the Income Tax Act in respect of an employment benefit; or
(b) for those taxpayers set out in items 22 to 42 of the schedule, all or a portion of interest paid or payable under Part I of that Act, on tax paid or payable under that Part in respect of an employment benefit.
CONDITIONS
3. The remission set out in paragraph 2(a) is granted with one of the following conditions:
(a) in respect of those taxpayers set out in items 1, 4 to 11, 13, 15, and 17 to 19 of the schedule, that the taxpayer agrees to reduce the adjusted cost base of any shares held at the close of the stock markets on December 29, 2006 that were, or are identical to those, purshased in 1999 or 2000 through the stock purchase plan for employees of SDL Optics, Inc. by the amount set out in column 2 of the schedule, divided be the taxpayer's effective federal tax rate on the employment benefit; and
(b) in respect of those taxpayers set out in item 2, 3, 12, 14, 20 and 21 of the schedule, that the taxpayer agrees not to claim a deduction in respect of net capital losses, equal to one-half the amount set out in column 2 of the schedule, divided by the taxpayer's effective federal tax rate on the employment benefit.
SCHEDULE
(Sections 2 and 3)
Item Column 1
Taxpayer Column 2
Amount ($)
1. Sheri Colwell 1,430.92
2. Timothy Couch 6,551.90
3. Grant Coulombe 7,261.63
4. Rhonda Fleming 10,753.70
5. Vicki Harris 15,868.95
6. Hanna Kowalski 3,563.23
7. John Lauder 734.62
8. Howard Lo 14,285.42
9. Timothy Ying Tai Lo 30,675.50
10. Laura Meyer 134,847.28
11. Christie Michaud 2,587.67
12. Christine Mollerud 183,371.94
13. Anthony Ong 14,247.68
14. Mark Ord 2,718.19
15. Dennis Rasmussen 3,975.60
16. Dean Rheault 4,038.83
17. Cornelis Scheffer 672.63
18. Pamela Shwab 183.47
19. Peter Stern 5,945.87
20. Penny Taylor 20,202.28
21. Sandra Woodward 2,641.04
22. Victoria Barter 14,589.26
23. Allan Baxter 3,451.66
24. David Bengston 441.50
25. David Benson 860.22
26. Shannon Campbell 3,390.45
27. Timothy Couch 1,679.34
28. Grant Coulombe 2,733.15
29. Gloria Davenport 21,102.90
30. Connie Gethings 479.08
31. Don Hargreaves 12,706.01
32. Howard Lo 1,003.51
33. Laura Meyer 52,089.41
34. Tracy Mills 47,108.37
35. Christine Mollerud 179,260.64
36. Carina Paredes 3,287.87
37. Martha Perdomo 543.98
38. Dean Rheault 1,584.06
39. Penny Taylor 28.91
40. Richard Van Acken 51.82
41. Joseph Wood 14,330.76
42. Sandra Woodward 3.30
EXPLANATORY NOTE
(This note is not part of the Order.)
The Order remits all or a portion of federal income tax paid or payable in respect of the 1999 or 2000 taxation years, as the case may be, by certain former employees of SDL Optics, Inc. Those individuals qualify for tax remission if the tax assessed on the employment benefit associated with shares acquired in 1999 or 2000 through the stock purchase plan for employees of SDL Optics, Inc. exceeds the total of the proceeds of disposition realized on the disposition of those shares and the market value of any of those shares held at the close of stock markets on December 29, 2006. The amount remitted is subject to certain conditions and adjustments.
The Order also remits, to certain former employees of SDL Optics, Inc., all or a portion of interest paid or payable on tax paid or payable on an employment benefit in respect of shares acquired in 1999 or 2000 through the stock purchase plan for employees of SDL Optics, Inc.
Wednesday, November 14, 2007
What was said..
IS THERE REAL REASON FOR HOPE THIS TIME?
A commentary on
Prime Minister Right Honourable Stephen Harper’s
Address to the Toronto Canadian Club November 8th 2007
What he said and what did he mean?
Victor Drummond ©
In November 2006 Canadian victims of the taxable benefits rip-off were thrown a straw of hope when conservative MP Gary Lunn -- for the riding of Saanich Gulf Islands in British Columbia --proudly announced that a group of JDS Employees had been granted a remission of their unjustified taxes.
He further proudly declared – on that occasion:- “It took a change in government to get someone to listen, but the prime minister has come through and delivered tax relief,” said Lunn
It’s not in the interest of the government to tax people on money they never saw.”
Unfortunately for Mr. Lunn -- and all other Canadians taxed on money they never saw – the fair tax relief began -- and ended right then and there.
Appeal after appeal -- by similar tax victims for identical tax relief -- were either entirely totally ignored – or a polite -- but totally fruitless reply was returned to the appellants.
Requests for an explanation -- of the unequal tax situation -- were equally futile.
No explanation of the unfair exclusion -- or details of the deal made with the BC, JDS victims -- has been forthcoming to date.
(Update after posting this article:- Some details of the deal made with the British Columbia JDS taxable benefits victims has now been published in the Canada Gazette
see url:- http://canadagazette.gc.ca/partII/2007/20071114/html/si99-e.html)
The conservative government is holding fast to their claim:- to bring “Fair taxation” to all Canadians -- by upgrading bulletins and pamphlets in support of their proclamation of “A Fair taxation Pledge”.
So far this wonderful “Fair Taxation Pledge” has done absolutely nothing to restore the RIGHT of “All Canadians” to fair and equal taxation.
There has been no material change made to the fundamentally defective taxable benefit legislation and consequently the victims taxed on fictitious “Income” still have no RIGHTS by which to recover their stolen property.
They are still waiting for equal treatment under the law – per The Canadian Charter of Rights and Freedoms, article 15 (1) and/or equal treatment per the new Taxpayers Bill of Rights, article (8).
So what did the Honourable Stephen Harper actually say in his address to the Toronto Canadian Club members on Thursday November 8th 2007?
Well among other things:-
“Harper promised Thursday that to maintain and enhance Canada’s prosperity over the long term, his Conservative government would develop “one of the most competitive and attractive tax environments on the planet.”
“Federal taxes will fall to the level they were at in the last year (1963) of the Diefenbaker government – before the policies of the late 1960’s before Trudeau – back to the level in nearly half a century,” he said.
The government still has the flexibility to help the forest industry or to allow capital write-offs for manufacturers, he said.
So that in part is what the Most Honourable Stephen Harper said. Now what did he mean?
While restoring the Federal Taxes to the level they were in the last year of the Diefenbaker government is Stephen Harper also prepared to restore the Taxable Benefits legislation and apply the same tax policies, (specifically taxable benefit legislation), to what they were in that same era?
I am certain John Diefenbaker would never have condoned taxing fictitious “Earned Income”. He had more integrity than that.
If the (Harper) government still has the flexibility to help the forest industry – and/or to allow capital write-offs for manufacturers – do they not also have the power to give truly fair taxation to all Canadians – and an equal – No -- not only equal – but based upon the updated “Pledge of Fair Taxation” -- even a greater obligation to do so?
So Mr. Prime Minister put some action where your words are and give real “Equal and Fair Taxation to All Canadians” – and give us truly -- the most attractive tax environment on the planet.
A NEAR CASH fix is not going to cut it. Show us the restoration of our RIGHT to fair taxation and give us a solid reason to vote you and your party back into office with a majority government.
See you at the voting polls – next federal election.
Victor Drummond ©
A commentary on
Prime Minister Right Honourable Stephen Harper’s
Address to the Toronto Canadian Club November 8th 2007
What he said and what did he mean?
Victor Drummond ©
In November 2006 Canadian victims of the taxable benefits rip-off were thrown a straw of hope when conservative MP Gary Lunn -- for the riding of Saanich Gulf Islands in British Columbia --proudly announced that a group of JDS Employees had been granted a remission of their unjustified taxes.
He further proudly declared – on that occasion:- “It took a change in government to get someone to listen, but the prime minister has come through and delivered tax relief,” said Lunn
It’s not in the interest of the government to tax people on money they never saw.”
Unfortunately for Mr. Lunn -- and all other Canadians taxed on money they never saw – the fair tax relief began -- and ended right then and there.
Appeal after appeal -- by similar tax victims for identical tax relief -- were either entirely totally ignored – or a polite -- but totally fruitless reply was returned to the appellants.
Requests for an explanation -- of the unequal tax situation -- were equally futile.
No explanation of the unfair exclusion -- or details of the deal made with the BC, JDS victims -- has been forthcoming to date.
(Update after posting this article:- Some details of the deal made with the British Columbia JDS taxable benefits victims has now been published in the Canada Gazette
see url:- http://canadagazette.gc.ca/partII/2007/20071114/html/si99-e.html)
The conservative government is holding fast to their claim:- to bring “Fair taxation” to all Canadians -- by upgrading bulletins and pamphlets in support of their proclamation of “A Fair taxation Pledge”.
So far this wonderful “Fair Taxation Pledge” has done absolutely nothing to restore the RIGHT of “All Canadians” to fair and equal taxation.
There has been no material change made to the fundamentally defective taxable benefit legislation and consequently the victims taxed on fictitious “Income” still have no RIGHTS by which to recover their stolen property.
They are still waiting for equal treatment under the law – per The Canadian Charter of Rights and Freedoms, article 15 (1) and/or equal treatment per the new Taxpayers Bill of Rights, article (8).
So what did the Honourable Stephen Harper actually say in his address to the Toronto Canadian Club members on Thursday November 8th 2007?
Well among other things:-
“Harper promised Thursday that to maintain and enhance Canada’s prosperity over the long term, his Conservative government would develop “one of the most competitive and attractive tax environments on the planet.”
“Federal taxes will fall to the level they were at in the last year (1963) of the Diefenbaker government – before the policies of the late 1960’s before Trudeau – back to the level in nearly half a century,” he said.
The government still has the flexibility to help the forest industry or to allow capital write-offs for manufacturers, he said.
So that in part is what the Most Honourable Stephen Harper said. Now what did he mean?
While restoring the Federal Taxes to the level they were in the last year of the Diefenbaker government is Stephen Harper also prepared to restore the Taxable Benefits legislation and apply the same tax policies, (specifically taxable benefit legislation), to what they were in that same era?
I am certain John Diefenbaker would never have condoned taxing fictitious “Earned Income”. He had more integrity than that.
If the (Harper) government still has the flexibility to help the forest industry – and/or to allow capital write-offs for manufacturers – do they not also have the power to give truly fair taxation to all Canadians – and an equal – No -- not only equal – but based upon the updated “Pledge of Fair Taxation” -- even a greater obligation to do so?
So Mr. Prime Minister put some action where your words are and give real “Equal and Fair Taxation to All Canadians” – and give us truly -- the most attractive tax environment on the planet.
A NEAR CASH fix is not going to cut it. Show us the restoration of our RIGHT to fair taxation and give us a solid reason to vote you and your party back into office with a majority government.
See you at the voting polls – next federal election.
Victor Drummond ©
Sunday, November 11, 2007
I Remember -- with
CANADA REMEMBERS – AND SO DO I
A commentary on the Irony of the 2007
Remembrance Day Ceremony.
By Victor Drummond ©
On November 11th 2007 I tuned in Television Channel 41, (Global TV), Toronto and watched/listened to the program honouring the veterans of wars that Canadians had participated in from 1914 to the present time
The ceremony was a very touching tribute to those who served in Canada’s military ventures in “The War to End All Wars” (WWI). And then in WWII and the Korean War and now in the Middle East conflict, and in multiple Peace Keeping assignments.
I cried with the families of those who had lost Fathers. Brothers. Sisters -- for they are paying the real cost of Canada’s efforts to bring an end to war and a peaceful social order to war-torn areas of this world. There are millions of people now reaping the benefit of their sacrifice.
And the world now does well to remember and honour them.
But I also remember my son – who graduated from University in 1991 with a Masters degree and believed in the unlimited opportunity for achievement he looked forward to in his native homeland.
He found work opportunities – one after another – each offering more remuneration than the last until he finally accepted a position with the JDS Fitel/JDS Uniphase Corporation of Canada.
His advancement with JDS was fast and before long he was accepted into a special group of employees who were given the opportunity to participate in a series of Employee Share Purchase Plans, (ESPP’s).
Feeling honoured to be so recognized he signed on to purchase ESPP shares, via payroll deduction, in a series of consecutive plans.
By 1999 he had paper holdings ostensibly worth more than a million dollars.
The Canada Revenue Agency, (CRA) also received notification of his potential gain via the employer’s requirement to report the “Fair Market Value”, (FMV) of all the ESPP shares delivered to him.
And according to the defective “taxable benefit” legislation -- this almost income was reported to the CRA as “Earned Income”. And taxed accordingly.
This phantom “Earned Income” inflated his taxes to levels several times greater than his real gross salary – and the only way he could possibly pay this tax levy was to sell enough of his share holdings to cover the taxes levied.
This strategy – although unfair – did not produce any real hardship UNTIL the year 2000 – when the tech market correction struck.
Then in July 2000 JDS shares rapidly dropped from a high of over $1,400 each to less than $40.00 each in a matter of weeks. My son’s paper holdings dropped in potential value of over $1,000,000 to a fraction of his tax levy for that year.
He was not even allowed to sell the ESPP shares he had left -- as that would have prevented him from utilizing the “generous?” provision of deferring some of these unjustified taxes via the use of form T1212. (A tax referral unto death.)
Consequently he – borrowed as much money as he could from my wife and I.
He wiped out his savings.
He remortgaged his home.
He maxed out his credit cards.
And deferred the balance of this tax extortion via the T1212 option.
What had happened to every Canadians RIGHT to honest and fair taxation?
Appeals for fair taxation – to the government in power in 2001 – fell on deaf ears.
Appeals for fair taxation – to our present politicians hasn’t faired any better – so far.
The “ASSUMPTION” made by the government of the day being:- “If you failed to sell your ESPP shares at the time they came under your control, (exercised), THEN you were making a conscious decision to play the markets -- AT YOUR OWN RISK.
AND WE, (CRA), HAVE THE RIGHT TO TAX YOU ON ANY GAINS YOU COULD HAVE MADE – AND THE RIGHT TO DENY YOU RECOVERY -- OF ANY CAPITAL LOSSES YOU ACTUALLY SUFFERED -- AGAINST THOSE SO CALLED TAXABLE BENEFIT GAINS.
(REALLY?)
That ASSUMPTION was not even true in many instances. There are documented cases where the ESPP/ESO shareholder was not allowed, and/or did not have the opportunity, to sell their shares at the time they were exercised.
The CRA should never have been permitted to levy taxes on unrealized “Income” in the first place. And doubly prevented from taxing fictitious profits on the basis of an ASSUMPTION.
That is not the Canada I took up arms to defend.
So my tears on this veterans day are not only for the members of our military – who now live in harms way – and not only for those who lost their lives to make the world a better place – they are also for those who have been financially decimated by an evil and unjust taxation system.
An unfair, unjust, unreasonable tax penalty -- on our taxable benefit victims -- that our present politicians seem willing to live with.
Victor Drummond ©
(with poppy proudly in lapel)
A commentary on the Irony of the 2007
Remembrance Day Ceremony.
By Victor Drummond ©
On November 11th 2007 I tuned in Television Channel 41, (Global TV), Toronto and watched/listened to the program honouring the veterans of wars that Canadians had participated in from 1914 to the present time
The ceremony was a very touching tribute to those who served in Canada’s military ventures in “The War to End All Wars” (WWI). And then in WWII and the Korean War and now in the Middle East conflict, and in multiple Peace Keeping assignments.
I cried with the families of those who had lost Fathers. Brothers. Sisters -- for they are paying the real cost of Canada’s efforts to bring an end to war and a peaceful social order to war-torn areas of this world. There are millions of people now reaping the benefit of their sacrifice.
And the world now does well to remember and honour them.
But I also remember my son – who graduated from University in 1991 with a Masters degree and believed in the unlimited opportunity for achievement he looked forward to in his native homeland.
He found work opportunities – one after another – each offering more remuneration than the last until he finally accepted a position with the JDS Fitel/JDS Uniphase Corporation of Canada.
His advancement with JDS was fast and before long he was accepted into a special group of employees who were given the opportunity to participate in a series of Employee Share Purchase Plans, (ESPP’s).
Feeling honoured to be so recognized he signed on to purchase ESPP shares, via payroll deduction, in a series of consecutive plans.
By 1999 he had paper holdings ostensibly worth more than a million dollars.
The Canada Revenue Agency, (CRA) also received notification of his potential gain via the employer’s requirement to report the “Fair Market Value”, (FMV) of all the ESPP shares delivered to him.
And according to the defective “taxable benefit” legislation -- this almost income was reported to the CRA as “Earned Income”. And taxed accordingly.
This phantom “Earned Income” inflated his taxes to levels several times greater than his real gross salary – and the only way he could possibly pay this tax levy was to sell enough of his share holdings to cover the taxes levied.
This strategy – although unfair – did not produce any real hardship UNTIL the year 2000 – when the tech market correction struck.
Then in July 2000 JDS shares rapidly dropped from a high of over $1,400 each to less than $40.00 each in a matter of weeks. My son’s paper holdings dropped in potential value of over $1,000,000 to a fraction of his tax levy for that year.
He was not even allowed to sell the ESPP shares he had left -- as that would have prevented him from utilizing the “generous?” provision of deferring some of these unjustified taxes via the use of form T1212. (A tax referral unto death.)
Consequently he – borrowed as much money as he could from my wife and I.
He wiped out his savings.
He remortgaged his home.
He maxed out his credit cards.
And deferred the balance of this tax extortion via the T1212 option.
What had happened to every Canadians RIGHT to honest and fair taxation?
Appeals for fair taxation – to the government in power in 2001 – fell on deaf ears.
Appeals for fair taxation – to our present politicians hasn’t faired any better – so far.
The “ASSUMPTION” made by the government of the day being:- “If you failed to sell your ESPP shares at the time they came under your control, (exercised), THEN you were making a conscious decision to play the markets -- AT YOUR OWN RISK.
AND WE, (CRA), HAVE THE RIGHT TO TAX YOU ON ANY GAINS YOU COULD HAVE MADE – AND THE RIGHT TO DENY YOU RECOVERY -- OF ANY CAPITAL LOSSES YOU ACTUALLY SUFFERED -- AGAINST THOSE SO CALLED TAXABLE BENEFIT GAINS.
(REALLY?)
That ASSUMPTION was not even true in many instances. There are documented cases where the ESPP/ESO shareholder was not allowed, and/or did not have the opportunity, to sell their shares at the time they were exercised.
The CRA should never have been permitted to levy taxes on unrealized “Income” in the first place. And doubly prevented from taxing fictitious profits on the basis of an ASSUMPTION.
That is not the Canada I took up arms to defend.
So my tears on this veterans day are not only for the members of our military – who now live in harms way – and not only for those who lost their lives to make the world a better place – they are also for those who have been financially decimated by an evil and unjust taxation system.
An unfair, unjust, unreasonable tax penalty -- on our taxable benefit victims -- that our present politicians seem willing to live with.
Victor Drummond ©
(with poppy proudly in lapel)
Tuesday, November 6, 2007
Veterans week 2007..
Ubique Fas et Gloria Ducunt
A commentary on the level of Integrity and Credibility
of Canada’s Recent and Current Politicians
By Victor Drummond ©
Veteran’s Week – November 5-11, 2007
Those familiar with Canadian Military mottos and slogans will immediately recognize the branch of the military your’s truly was a member of in the 1940’s.
For the benefit of those who are not familiar with Latin -- or Military Motto’s -- the title of this article translates into:- “Whither Right and Glory Lead.” And at the time I joined the Canadian military it was loosely translated to me as:- “Everywhere Honour and Glory Lead.”
It was a motto we wore on our badges with pride – and the neatly woven white lanyard which graced our battledress uniforms gave us a feeling of pride and distinction.
Our Officers and NCO’s did an excellent job of developing esprit de corps and convincing us that we were the good guys in that WWII conflict with the Nazi war machine.
And we had solid reason to believe them.
Had anyone told me -- back then -- they had been levied “Income Taxes on a fictitious “Earned Income” and these same unjustified taxes forced them to borrow money, and/or re-mortgage their home, in order to pay them, and/or they said the government had obliged them to carry a deferred tax burden -- on this imaginary income -- until paid.
I would have promptly challenged them.
I would have asked them which third-world country they came from? If they replied Canada -- I would have told them they must be joking. Such an unconscionable series of events would never – in a million years -- be condoned by the government I was defending. (Actually it only took about 50 years -- but it should have taken a million years or so)
But then again I am sure such things never happened -- in my Canada -- back in those days.
What did Happen? Did we lose WWII and no one informed me?
Taxing non-existent “Earned Income” sure sounds like Nazi style taxation to me.
Regardless of which translation you prefer -- it comes down to:- As members of Canada’s military -- We individually were taking the path of:- going where “Honour/Right” and “Glory/Praise” might take us. And we were proud to do so.
Back then I am convinced no one thought -- for one moment -- that the military was the only part of our government that held fast to such Honourable and Praiseworthy ideals.
I for one believed -- at that time -- it was a quality that permeated the entire Canadian social and administrative structure -- and then merely reflected in our military motto.
In spite of the usual political wrangling -- I -- and most of my comrades -- held a rather high opinion of the integrity, honesty and credibility of our political leaders.
So what has happened to change that opinion?
Unjust, unfair, unequal taxation – and the general political condoning of this travesty -- is the main reason in my case. Plus adding insult to injury by proclaiming a “Pledge of Fair Taxation” -- while this travesty of unfairness is still kept in operation.
Where is the “Right/Honour/Justice” in levying “Income Tax” on non-existent “Income”?
Where is the “Right/Honour/Fairness” in forcing taxpayers to borrow money, and/or mortgage their homes, and decimating their children’s inheritance -- to pay these unjustified taxes?
Where is the “Praise/Glory” in allowing this travesty of injustice to continue – and ignoring
all appeals for “Fair and “Equal Treatment”?
Where is “Equal Treatment” under the law – when some taxpayers are given remission of these unjustified taxes while other similar taxpayers are denied the same consideration. They are not even given a reason for being excluded from the same benefit?
Offering a clear and plain language explanation -- of a defective taxable benefit law – as a response to an appeal for “Fair” taxation is NOT FAIR AND EQUAL TREATMENT UNDER THE LAW – it is an insult to an average person’s intelligence.
Why not be fair and correct the defective legislation – and truly apply “Fair” taxation to all Canadians? Are our politicians having a problem with definitions of the word “Fair”?
(Take my word for it:- It doesn’t only mean blonde and blue-eyed.)
We veterans were courageous enough to fight for our Canada when the need arose.
What are you voters and our politicians now prepared to do for us about this tax rip-off?
If you know – then please tell me -- for I have not been able to find one speck of:- “Right or Honour” or “Praiseworthy conduct or Glory”. Neither -- in the defective tax legislation that produces such an unfair result – nor in those now in government who have the power to correct this problem -- but prefer instead to remain silent and allow it to continue.
How many other veterans have family members that were financially decimated and are still burdened with deferred taxes that were levied on fictitious “Earned Incomes”?
Can you – our politicians now face these tax victims today -- with a poppy in your lapel?
Only a genuine hypocrite could.
What credit is it to those who would vote these unworthy politicians into office without a commitment -- from any of them -- to correct this injustice?
The least you -- the reader -- can do is send a copy of this article to every Canadian of voting age you know and a copy to your MP – with the message:- “Commit to fixing this issue in a timely manner – or look elsewhere for this vote in the coming federal election.
Victor Drummond ©
(with poppy proudly in lapel)
Sunday, November 4, 2007
Actions Speak louder..
ACTION VERSUS WORDS
A Literal Translation of the Finance Minister’s
Jan 30th 2007 Fair Taxation Speech
By Victor Drummond ©
November 2007
On January 30th 2007 the Honourable Jim Flaherty, Minister of Finance addressed the House of Commons and made the following statement:-
“Make no mistake, the decision that was taken on October 31st, (2006), is all about fairness—fairness in our tax system, fairness for hard-working Canadian taxpayers and their families, fairness for seniors, for business and other levels of government," said Minister Flaherty. "I am not prepared to sacrifice the interests of millions of hard-working Canadians who pay their taxes and play by the rules so that a select group of special interests can enjoy a tax holiday."
Now we all know that words used by a politician often have different meanings than the common dictionary definitions or the generally accepted meaning when the same word(s) are used in everyday conversation.
The only way a politician’s message can be truly comprehended -- by the average person -- is by the action that the politician actually takes to give substance to his commitments.
Judging from the action taken by the Hon Jim Flaherty – on the issue of “Fair Taxation” – from January 30th 2007 to his latest commitment to amend tax levels – on October 30th 2007 what he actually said on January 30th 2007 was:-
“Make no mistake, the decision that was taken on October 31st, (2006), is all about fairness – fairness in most of our tax system, (excluding taxable benefits legislation), fairness for hard-working Canadian Taxpayers and their families, (except those who participated in employer’s Employee Shares Purchase Plans), fairness for seniors, for business and other levels of government,” said Mr. Flaherty.” I am not prepared to sacrifice the interests of millions of hard-working Canadians who pay their taxes and play by the rules so that a select group of special interests can enjoy a tax holiday. “Also I am not prepared to
amend the defective taxable benefit legislation so that a few hundred thousand hard-working Canadians who pay their taxes and play by the rules may join those receiving the benefits of “Fair” Taxation.”
On October 30th 2007 the Hon Jim Flaherty came through for the average Canadian Taxpayer in a big way. Raising the basic Income Tax exemption level, dropping the GST by a whole percentage point and giving business enterprise the lowest tax rate in the major group of industrialized nations.
Why are the taxable benefit victims being totally ignored?
Does the Minister of Finance actually believe it is fair to tax Canadians on “Income” that never happened?
Is it not Fair enough to reserve taxing investors and speculators on real gains -- via the Capital Gains Tax – if they are ever lucky enough to have any?
Does the Minister of Finance actually believe it is fair to tax Canadians differently based solely on the means by which they acquire corporation shares? And yet allow stolen shares to be taxed as a “Capital Gain” – if the thief is honest enough to even report the theft. Isn’t something wrong here – do you think?
For example if I buy shares in my employer’s corporation from a regular stock broker I am only taxed on the capital gains I actually make when I sell the shares. No problem here --that is Fair.
But if I buy those same shares from my employer -- by way of an Employee Shares Purchase Plan -- then I am taxed on any potential gain I might have made – even when I actually lose money on the deal. That is:- DEFINITELY NOT FAIR.
In this latter instance the tax levied is the same as if I had sold my shares on the day I took control of them. That tax applies whether or not I actually sell the shares and whether or not I ever realize a cent of return from those shares. How is that for “Fair Taxation”? Totally unfair – don’t you think?
Can anyone believe that this tax set up is “Fair”?
If they can believe it is -- then I do not want that person guiding the Canadian Government on my behalf.
Do you want someone with such a distorted comprehension of words such as “Fair”, “Just”, “Honest”, “Integrity” “Equality” “Credibility” -- managing your government’s affairs? If “yes” then do the rest of us a favour and stay home on federal election day.
Judge the claims and promises made to you -- during the upcoming Federal Election – and translate each promise according to the speaker’s track record and actions taken related to prior promises made.
Make your vote count for true credibility, honesty, fairness and integrity. Canada will thank you, I will thank you and all Canadians will be much better off for your vote.
Victor Drummond ©
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