Let's K.I.S.S. and ...

2008 NEW YEARS RESOLUTION
“Let’s K.I.S.S & MAKE UP”

A proposal by Victor Drummond ©
For a Better Canada in 2008
01 January 2008



It has been a long standing tradition in Canada for people to take stock of the things they have done in the previous year and to make promises, (resolutions), to avoid the mistakes of the past and perform better in the New Year.

Hopefully our representatives in government practice the same tradition.

Although our government has serious concerns – regarding international problems -- in addition to the difficulty associated with keeping the majority at home satisfied – there should be adequate time and money left to address the abused minority of Canadians.

Specifically those Canadians that have been victimized by an insidious, irrational, interpretation of the Canadian taxable benefits legislation.

The principle of “Income Taxation is very logical and straightforward.
If a Canadian has an “Income” -- which from all sources -- exceeds their income exemptions THEN the unprotected “Income” is taxed.

The amount of explaining required by Revenue Canada Agency, (CRA), to make the tax on real income understandable is very clear and easy for the majority of taxpayers to comprehend and apply properly.

Usually this is accomplished -- without difficulty – by merely following the T1-General Income Tax and Benefit Guide and forms.

Even when a taxpayer has “investment income” and has “Capital Gains” to report – the average person can fill in the S3, S3-supp, forms without assistance and calculate the correct tax to pay.

That is unless the person has acquired their employer’s corporation shares via an Employee Shares Purchase Plan, (ESPP), or an Employee Shares Option, (ESO), plan. Then the whole scenario becomes extremely complex.

For starters:- is the employer’s corporation a Canadian Controlled Private Corporation, (CCPC)?

If “Yes”, then no taxes are paid until the shares are actually liquidated AND the Gain/Loss is established.

If “No”, however, then a whole new set of rules kick-in and one has no less than a dozen or so Interpretive Bulletins, (IT’s) and Guide Book publications to help the employee and employer figure out how to calculate:- what, when and where to begin to estimate the taxes to be paid. e.g. T1212, T4137(E), T4130(E),IT-470R, IT-256R, IT-116R3, for example.

It may also be interesting to note that IT-470R “Employee’s Fringe Benefits” has been revised 47 times so far.

One more try ought to make it right. Per revision 48 -- exclude corporate shares as a taxable benefit -- and -- you have it made.

Intangibles such as “Fair Market Value”, (FMV), and assumed events -- such as a conscientious decision to play the markets -- enter into the taxable benefit formula -- even without a shadow of evidence to support such assumption(s).

Whether the assumption is fact -- or fiction -- makes no difference.

The bottom line result is a penalty tax, (or rather a fine), imposed on the basis of a flimsy implication, e.g. the taxpayer is somehow guilty of some kind of offence,

In essence the old adage:- “What a tangled web we weave when first we practice to deceive.” -- comes to mind -- whenever I look at the convoluted, illogical rationale for taxing Canadians on an “Intangible”, FMV, potential Income.

The bottom line -- to this insidious, tangled web of rules and regulations -- being that thousands of “Hard working, honest, conscientious Canadians have been legally robbed.

So now is the ideal time to apply the K.I.S.S. principle and exclude -- the non-near-cash equities, i.e. corporate shares and stocks that trade on a conventional stock exchange – from the taxable benefits classification.

A very simple and straightforward solution.

Then after the KISS principle has been applied -- let’s Make-up.

Provide a retroactive period of 10 years -- for all Canadians that have been taxed on non-existent “Income” -- to re-submit their tax returns for every year they paid taxes on non-existent income and report all shares bought, and/or stolen and liquidated -- in those years -- as they really were, i.e. Capital equity transactions.

At the beginning of year 2007, high ranking members of the newly elected conservative government began making speeches featuring the government’s new policy of providing:- “all Canadians” with Fair and Honest taxation.

This same theme was part of the conservative party’s election platform when they were campaigning to be elected in 2006.

The New Year is an ideal time for our government to put substance to their commitment to “Fair Taxation” and make up with those Canadians who have been treated most unfairly by the “Income” Tax system.

Looking Forward to the best year ever – 2008

HAPPY NEW YEAR EVERYONE

Victor Drummond ©