WHEN IS ONE..

WHEN IS ONE -- ONE TOO MANY?
A commentary on the high tolerance Canadians
have for intolerable situations.

By Victor Drummond ©
November 2008

Tolerance is most often touted as a virtue.

This is true in cases where people of different races, different cultures and holding different opinions accept each other at face value and remain good neighbours.

There are times, however, when tolerance, equates to indifference to the abuse, distress, and violation of every Canadians basic rights and under these circumstances tolerance becomes apathy or worse.

When people fall victim to a miscarriage of justice -- that puts their very life at risk or at the very least causes them to be incarcerated for a crime they didn’t commit – then when the truth becomes known the public should become absolutely intolerant of the situation until justice prevails.

Prime examples of such events are the conviction of Stephen Truscott in 1959 for the murder of Lynn Harper and the conviction of David Milgaard in 1970 for the murder of nurses aid Gail Miller.

Both men were totally innocent of the crimes of which they were convicted and both spent many years in prison before evidence of their innocence was brought to light and the media took up the fight to obtain justice for them.

The CBC Fifth Estate produced documentaries to bring the injustice imposed on these men to public attention across Canada.

Once the Canadian public fully understood the abuse and distress imposed upon these victims -- of a miscarriage of justice – they raised a public outcry that expedited action by the government justice system to release them from prison and eventually to make monetary compensation for the distress they and their families had endured.

Public and media tolerance in this kind of situation is no virtue.

Everyone recognizes one person -- victimized in this way -- is one too many.

The foregoing are fortunately rare, and, extreme examples of incidents when honest hard working Canadians became victims of a justice system that somehow had a serious flaw in the way it operated to serve the public.

In these examples real crimes had been committed and these innocent suspects were found guilty on the basis of some very wrong assumptions.

If one person falsely convicted of a real crime is one too many how about thousands of Canadians deprived of their life’s savings – some even forced to remortgage their homes – when they have committed no crime and are penalized on the basis of flawed legislation and unproven assumption?

Again one such victim is one too many.

Both Canada and the United States have honest, hard working taxpayers who were levied huge amounts of taxes on money they never received, i.e. phantom income.

Grass roots U.S. victims formed one or more lobby groups to appeal to their government for fair taxation and compensation for taxes already paid.

The U.S. news media and government paid little attention to the plight of those victimized by the insidious tax on phantom income until two victims committed suicide.

Among the reasons given for their death was the stress associated with the Alternative Minimum Tax, (AMT) tax on money they never received and did not have.

In October 2008 the group named ReformAMT announced the U.S. congress had passed bill HR 1424 amending their defective AMT legislation which revoked all taxes levied on phantom income and refunded such taxes already paid in the form of tax credits and cash.
For more details visit:- www.reformAMT.org

The U.S. Government took this action in spite of, or perhaps because of, a world wide economic downturn.

Putting billions of dollars back in the hands of the rightful owners may be a means of fighting the economic problems now facing their country.

Canadian victims of our equally flawed taxable benefit legislation have not been so lucky.

The Canadian government has so far ignored the plight of -- all but 30 or so -- honest, hard working Canadians victimized in the same way as their American counter-parts.

Likewise the Canadian news media has devoted little time or space to articles decrying the abuse, and distress of Canadian taxpayers.

Grass-roots Canadian victims have also formed an organization called:- “Canadians for Fair and Equalized Taxation”, (CFET) to appeal to our government for exactly the same action as the U.S. government has now taken.

For more than a year now CFET has sent appeal after appeal to Canadian Members of Parliament pleading for corrective action to be taken. So far to no avail.

Will it take the suicide of some innocent Canadian victim(s) to get our government and/news media to do something to fix the problem? I certainly hope not. But the possibility of this happening is very real.

If you think I am exaggerating the situation here is a copy of a letter by a Canadian victim who has previously openly declared he hopes he expires before his tax deferments do.

This victim has lived for years now with the stress and anxiety associated with being financially ruined by taxes on phantom income.

The writer of this letter is a Former employee of Nortel Networks Corporation.
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In November of this year I had my 68th Birthday, I have now been retired for 9 years (not my idea but Nortel’s!)

As I reviewed my life I realized that perhaps the most defining moment came down to the time when I ticked the “Receive Shares” box rather than the “Receive Cash” box when exercising my Nortel Stock Options.

Had I taken cash I would be sitting here with over $1million in the bank plus my RRSP’s (which admittedly have been reduced over the past few months by over 30%).

In reality I now sit here with no cash and a debt of approximately $200K hanging over my head plus my RRSP’s (which have …etc!)

Why is that? Well back in 2000 the Government announced a program whereby an option holder could take shares instead of cash and defer the taxes until the shares were actually disposed of.

The catch, as I later found out, is that unlike RRSP’s where your deferred taxes are based on the amount you actually withdraw, the tax on options is always based on the amount you could have had if you had taken the cash and not the amount you actually get when you sell.

So the Government insists that no matter when I sell, or what I really get, I will owe tax based on over a $1million of imaginary income. In reality, if forced to sell today I will be lucky to receive $1thousand!

Graciously they also accept that under these circumstances I will have a loss, but they call it a capital loss and say I cannot claim that against income! I never had the money but they won’t let me balance any real loss against the phantom gains.

In addition Nortel closed at 69 Cents today in Canada and is on track to be de-listed in both Canada and the USA (and probably the rest of the world as well).

They lost an astounding $3.1Billion in the last quarter!

And in these dark times I do not see how they can survive. Particularly as the Canadian Government expects them to pony up a further Billion or so to bring the Pension Fund up to the required level.

Nortel is going to go under I think and trigger this tax debt (not just for me but many others, so beware!)

As I said I have no cash so it will have to come out of my RRSP’s, running the figures through my “Quick Tax” program shows that to come up with over $200k I will have to cash over $400K of RRSP’s which leaves me with almost nothing after 50 years of saving.

Further bad news, If Nortel goes under the Pension fund will have to reduce the size of all pensions.

If Nortel goes under the Retiree Health Plan ceases to exist.

So, having worked hard and honestly for 50 years almost everything is gone. What a fantastic retirement I am having!

Without this tax on phantom income I could probably still live reasonably well, with it – well I just don’t know.

I never dreamed my retirement would be this bad, and all because I ticked the wrong box! (I ticked it only because I didn’t need the cash and was trying to ensure my options didn’t expire, and of course I also misunderstood what they meant by Tax-Deferral)

They used to do it this way in the USA as well but after 2 suicides someone took notice and this year their Government acted. They are now taxed on what they get when they sell. Seems fair to me so why can’t my government see that? Heaven knows I’ve asked them enough times.

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Why is the Canadian news media reluctant to publicize the distress and abuse this unjustified and insidious tax policy is imposing on thousands of our citizens.

Many victims are reluctant to speak out for fear of drawing the wrath of the Canada Revenue Agency and further verbal abuse from the people they voted to represent them in parliament.

I have seen copies of letters of appeal sent -- by several victims -- to their Prime Minister, and/or their riding Member of Parliament, and/or the Ministers of National Revenue and National Finance.

Many of those letters were never acknowledged and those that were gave replies that would be an insult to anyone with at least the intelligence of a fifth grader.

The Minister of Finance sent one victim this excuse:- “You have been taxed according to laws that have been on the books for many years – therefore your tax levy is justified.” (or words to that effect.)

What a sick excuse for ruining a person’s financial situation and destroying their peace of mind for the rest of their life.

Everyone over the age of 20 years has seen several Canadian laws -- that have been on the books much longer -- ruled out of date and no longer valid.

Our television public affairs programs – such as “The Fifth Estate” and “W5” – have not picked up on this issue which among other things violates every Canadians “RIGHT” to fair and just taxation.

Our Radio and Television talk show personalities such as CFRA’s Lowell Green and CBC’s Rex Murphy have failed to address this issue. Why not?

Are they personally -- or their bosses -- ignorant of this situation or are they intimidated by the fact they might put some subsidies in jeopardy? I suspect the latter as I have not yet concluded anyone -- in their right mind – could actually agree with taxing people to financial extinction against income they never received.

For more details on the Canadian victims of the taxable benefit fiasco visit web page www.cfet.ca

Read the press articles and sign the petition you will find there.

If you wish to show support for the CFET objective to achieve fair taxation then click on the link:- inquiry@cfet.ca and become a member.

CFET is non-partisan, non-profit, and has no membership fees or dues.

Victor Drummond ©