MERRY CHRISTMAS ..

MERRY CHRISTMAS – HOUSE OF COMMONS
A commentary on the puppet performance of those elected to serve the best interests of their constituents and all Canadians and regardless of their failure to fulfill their duties I wish them each and every one a very Merry Christmas and an enlightening New Year.

by Victor Drummond ©
December 2009

December 2009 marks the third year anniversary of the exceptional early Christmas gift bestowed upon 37 Canadians victimized by Canada’s tax on money that never existed.

The Hon. Gary Lunn, CP, MP, for the riding of Saanich – Gulf Islands, British Columbia set an example of the kind of representation every Member of Canada’s House of Commons is expected to provide to their constituents.

Gary had the support of the recently elected Prime Minister – The Right Honourable Stephen Harper, CP, MP, PM who approved the Tax Remission Order (TRO), requested by Gary, to provide the “fair taxation” promised by the federal Conservative Party in their pre-election campaign: “STAND UP FOR CANADA”.

The Hon, Carol Skelton, CP, MP, Minister of Natural Resources, requested the Gary Lunn TRO be prepared but by the time the TRO was ready for signing Carol had been replaced by the Hon Gordon O’Connor, CP, MP, as Canada’s Minister of Natural Resources.

In spite of warnings -- issued by senior bureaucrats in the Department of Finance -- that granting “fair taxation” to a few Canadian taxpayers -- via the Gary Lunn TRO – is unfair to the thousands of other Canadian excluded taxpayers victimized in the same way and was setting a dangerous precedent – the Hon, Gordon O’Connor and the Right Hon, Stephen Harper both signed the Gary Lunn TRO.

Canada’s Governor General, Her Excellency Micheal Jean then signed the TRO, giving it the force of law while declaring she does so: “in the best interests of all Canadians.”

The December 20 edition of the Vancouver Sun Newspaper carried a report on this tax remission under the title: “Tories Kill Tax on profit never made.”

On Tuesday, December 19 2006, Gary Lunn announced: “his government is offering immediate tax relief to the employees of the defunct JDS Uniphase plant in Saanich, who had been taxed on the phantom profits.”

“It took a change of government to get someone to listen, but the Prime Minister has come through and delivered tax relief.” “It’s not in the interest of government to tax people on money they never saw.”

The Victoria Times Colonist Newspaper also carried a report of this momentous event and in addition the journalist, Cindy E. Harnett, interviewed the Right Honourable Stephen Harper and asked him if the tax relief granted the SDL Optics Inc./JDS Uniphase phantom income tax victims might be extended to all Canadian Taxpayers caught in the same tax trap? The Right Hon. Stephen Harper is quoted as replying to that question: “we’ll get it resolved – it will take a change of code.”

Apparently the means of getting this unjust, unfair, violation of item 8 of the updated “Taxpayers Bill of Rights” and a gross violation of the government document: “Serving Canadians – Canada’s System of Justice” “resolved” is to change the governments “code of ethics” and leave the defective income tax legislation -- that is used as an excuse to legally rob thousands of honest, hard-working Canadian taxpayers -- still in place.

Instead of extending the “fair” tax treatment -- provided a paltry 37 victimized Canadian Taxpayers via the Gary Lunn TRO – to all honest, hard-working Canadian taxpayers caught in the same tax trap the Harper Government has slammed the door shut and has implemented a policy of stonewalling all appeals for fair treatment by victims and by the grass-roots organization “Canadian for Fair and Equitable Taxation” (CFET).

Even the leaders of Canada’s federal Loyal Opposition party’s are close-mouthed on this issue.

Why? Are they not the watchdogs of the government just waiting to find a legitimate misdeed on the part of the party in power? Do the leaders and members of the opposition party in the House of Commons really believe the taxation of Canadians on phantom income is fair, justified and proper?

Even if they buy into the ridiculous claim by the Hon James M. Flaherty, Canada’s Minister of Finance, that the taxation of phantom income is “fair” because those taxed in this way are treated the same as all other Canadian stock market Investors/speculators – then reply to victims/CFET appeals and tell everyone what they believe to be true.

Silence on the other hand implies they can not convince themselves – let alone anyone else – that they believe the taxing of some and the revoking of this same tax for others – is fair, justified or ethical
and so our watchdogs are muzzled.

When you can not trust those who seek our support to be elected as our servants and representatives in government then it is time to “demand any candidate soliciting your vote – earn it by committing to support correction of Canada’s defective income tax act to provide the same tax treatment for all victimized Canadian Taxpayers.”

In closing I wish every member of Canada’s House of Commons the best Christmas ever and may they each receive the reward they so richly deserve.

See you at the voting polls in the next federal election O’Grady.

Victor Drummond ©

KEEPING THEIR EYE ON THE BALL..

KEEPING THEIR EYE ON THE BALL – BALL? -- WHAT BALL?
A commentary on the conservative government’s lack of concern for truth and their lack of concern for their abuse of their own citizens –
never mind any concern regarding the torture of Afghans by Afghans.

By Victor Drummond ©
December 2009

Don’t shoot the messenger.

But that is exactly what the conservative government did when Richard Colvin reported multiple times, in 2006 through 2007, there was reason to believe Afghans detained by the Canadian military as suspected dissidents, or possibly even terrorists, were being tortured after being turned over to Afghan authorities.

Although it is well known that interrogation methods, in countries such as Afghanistan, are far different than in Canada, or the United States, it apparently was not politically correct for the Canadian military or the Canadian government to officially, and publicly investigate Colvin’s reports.

Instead it was much less likely to offend our Afghanistan allies to deny any knowledge or suspicion what Richard Colvin was reporting had any validity what-so-ever and if the Canadian Military in Afghanistan was in fact delivering suspected terrorists to the Afghanistan prisons to be tortured then so be it. We don’t want to know about it. In fact we are more than willing to throw our own citizens and public servants under the bus to maintain our official stance of ignorance of the issue.

After all is said and done who knows better than the Afghan prison guards, and prison officials, how to deal with their own citizens. A forced confession is apparently as good as any other confession when it comes to obtaining an acceptable conviction record in places like Afghanistan.

And what about failing to supply the international Red Cross with accurate details of the detainees turned over to the Afghan authorities? Who dropped the ball on that important function? Was it a duty the military should perform? It would seem it should be as they are the first level people involved in the prisoner transfer process. If it was left for this important function to be performed by Canada’s Minister of Defence then it is no wonder the Red Cross was left out of the loop. He claims he never heard of Canadian detainees being tortured after being turned over to the Afghan authorities.

Then what about the high ranking Canadian Military Officers who initially testified they had no knowledge of any Afghans held by the Canadian Military that were tortured after being turned over to the Afghan Prison authorities? Three of those high ranking Canadian Military Officers testified they had no knowledge of such events taking place and there was no evidence – to their knowledge – that any such events had ever taken place.

Was it a burning conscience or the threat of exposure that inspired one of those high level officers to do an about face and admit there was evidence of at least one Afghan citizen detained by the Canadian military being tortured after the Canadians turned this detainee over to the Afghan authorities and the Canadian Military then took the prisoner back into Canadian custody?

What in hell is going on in the Canadian government? If in fact the Minster of Defence didn’t receive Richard Colvin’s reports then there is a serious breakdown in Canada’s internal system of communication.

Not many Canadians believe the Hon. Peter MacKay when he says he did not know of the warnings issued by Richard Colvin.

Even fewer Canadians believe our Right Honourable Stephen Harper was unaware of Colvin’s reports and that our PM really believed there were no incidents of prisoners -- delivered to the Afghanistan prisons by the Canadian Military -- being tortured.

There was a time when I would have defended the title of “Honourable” and “Right Honourable” that precedes the names of our Members of Parliament that hold a portfolio – but unfortunately I am overwhelmed by evidence to the contrary.

When our government leader made a promise to implement an “Action Plan” -- to provide “Fair Taxation” for “All Canadians” and at the time of the Gary Lunn “Tax Remission Order” (TRO)was quoted as saying “We’ll get it resolved” and “it will take a change of code.” in response to the question: “Will the fair tax deal granted by the Gary Lunn TRO be applied to all similar victims of taxes on money never seen?” – and then turned his back on the rest of the victimized Canadians – his credibility went down the tubes. From now on I take everything Stephen Harper says with more than a grain of salt.

When the Hon. James Flaherty, Minister of Finance declared publicly: “the taxing of honest, hard-working Canadians on phantom income is “fair” because they are treated the same as all other Canadian investors and stock market speculators” -- then his credibility also went down the tubes.

No other Canadian stock market investor and/or speculator are taxed on money that never existed and the Hon? Mr Flaherty should be fully aware of that fact.

It may not be a case of deliberate treachery, however, when the Right Hon Stephen Harper turned his back on those he had promised to provide fair taxation. It may be a case of defective comprehension.

If Harper really believes he has kept his promise of “fair taxation for all Canadians” then he is not deliberately telling a falsehood – he is merely stating something he believes to be the truth but is factually incorrect.

If that is the case then it leaves a person to wonder what other hallucinations does our PM hold to be true?

He may have just lost sight of the ball he was supposed to score with.

And what about the seemingly perfidious Minister of finance. He may have also merely taken his eyes off the ball he was expected to play and then in his mind his promise of “fair taxation for all Canadians” was now a reality.

How else can you explain his outrageous claim that victims of taxation on phantom income are treated the same as all other Canadian investors? You couldn’t get further from the truth if you tried.

When our government leaders can not even find the ball -- they are supposed to be watching --then they may not be competent to make decisions that could, and often do, impact negatively on the country as a whole and upon Canadians collectively or individually.

It is time for Canadians to inform their riding MP’s, including opposition MP’s, that they demand the representation our citizens have a right to expect by the person they elected to the House of Commons.

For starters inform them you demand the Canadian government fulfill their promises of: “fair taxation for all Canadians” and that our defective taxable benefit legislation be amended to put an end to taxing honest, hard-working, Canadians on “Earned Income” money that never existed..

Remind them the U.S.A. government has already corrected their comparable “Alternative Minimum Tax” (AMT) legislation and put in place a program to fairly compensate those U.S. taxpayers who had already been victimized under the old legislation.

Canada has no excuse for continuing this abuse of our taxpayers so demand a commitment to correct this problem in Canada -- or no support in the next Federal Election.

See you at the voting polls in the next Federal Election O’Grady.

Victor Drummond ©

JUST WHAT WOULD YOU DO...

JUST WHAT WOULD YOU EXPECT
When you find yourself facing an income tax levy
that is 200% larger than your gross income that year:
(1) what would you do? And (2) what would you expect?

A commentary by Victor Drummond ©
December 2009

Gainfully employed Canadians soon become familiar with the Income Tax System used in this country. The process is simple. As the deadline to pay your income tax approaches your employer provides you with a statement of your previous year’s gross income – on a T4 slip – which also contains a list of payroll deductions and your net income for the year.

Employees who receive taxable gifts or awards from their employer will find their T4 slip also contains dollar values, in additional panels, which the employee is instructed to report on specified lines of their T1 General Tax Return. Depending upon the nature of the taxable benefit the employee receives -- the tax levied and deductions applied will vary.

For example the use of company car for both business and personal use will generate a taxable benefit that is based on the percent split of personal versus business of the total distance travelled during the year. The operating and maintenance cost would be split along the same percentage.

Regardless -- of the personal percent use of the car -- the tax generated would never equal or exceed the employees real earned income.

The first time your income tax levy exceeds your gross income you might think there has been an error made somewhere so you visit your nearest Canada Revenue Agency (CRA) tax office to speak with an appeals officer.

After checking your employment records the appeals officer explains your reported “earned” income for the previous year includes a “DEEMED” taxable benefit derived when the shares you received from your employer -- per an Employee Shares Purchase Plan (ESPP) -- were delivered to you.

“What about those shares you ask?” I signed up to purchase 2000 shares a year ago at an employee cost of $2.50 per share.” “I paid for those shares, in cash, out of my savings account.” “In July last year my employer notified me that my shares had been delivered and would be held in my employee account until I decided what to do with them.” “So what’s the problem?”

The appeals officer explains that on the day your shares were transferred to your account they were trading at $250.00 per share which gave you a DEEMED gain of: ((250x2000) – (2.50x2000)) = (500,000 – 5,000) = $450,000.00

This $450,000 gain is “DEEMED”, by the CRA, to be a “taxable benefit” and is added to your “earned” income at the “Capital Gains” inclusion rate of 50% for last year. i.e. $225,000.00 plus your normal $40,500.00 annual salary.

This brought your gross earned income for the year to $265,500 which after the usual exemptions and deductions left you a taxable income of $238,200.00 Your bottom line tax rate, provincial and federal works out to 36% which produced a tax of $85,752.00

You are shocked. You say to the appeals officer: “I never received one red cent – so far – from those shares – they are still sitting in the account with my employer.” “And for your information I would be lucky to be able to sell them today for the money I paid for them.”

The appeals officer informs you of the good news: “As you paid less than a total of $100,000 for your ESPP shares you don’t have to pay the tax immediately.” “You may apply for a tax deferment now, and every year, until you sell your shares, or you move out of Canada, or your employer corporation goes out of business.”

That is good news you say! “So I won’t pay tax on the deemed gain of $450,000 I will only pay tax on the money I receive when I sell my shares.” “That’s fair enough.”

The tax appeals officer replies: “That is not quite the way it works – You pay tax on the deemed gain as of the date of exercise regardless of whether or not you lose or gain at the time of sale.”

You think this over for a moment then say: “What’s good about that arrangement?” “As long as I have that tax hanging over my head I won’t have a worry free moment.”

“So what happens if I sell my shares now for the $5,000.00 I paid for them and declare a zero taxable benefit?”

Again the appeals officer informs you: “that is not the way it works.” “The taxable benefit legislation “ASSUMES” you have received a taxable benefit at the moment you take possession of equities acquired via an ESPP or ESO. If you sell your ESPP shares now it will generate an immediate payment demand of the taxes levied even though you have actually have a zero gain situation.

“That is outrageous”, you reply, “How can anyone in their right mind expect people to pay “income tax” on money that never existed?” “I’m going straight to my Member of Parliament about this ridiculous tax and we will see about this tax on zero income.”

So you make an appointment to meet with your MP and when you arrive you are treated with courtesy and made welcome. After explaining your phantom income tax situation and your discussion with the CRA Tax Appeals Officer you MP appears shocked.

Your MP assures you he will send a letter immediately to the Hon Minister of Finance (MOF) informing him of this ridiculous tax situation and he also assures you the Minister of Finance will take prompt action to address the problem.

Now that is the kind of representation you have a right to expect from your MP.

A few months pass by and you begin to receive notice letters from the CRA reminding you your tax return has not been received and that penalties are pending if you do not submit your tax return promptly.

Confident your MP will take care of this problem you wait to hear that your tax assessment has been amended at the request of the MOF.

A month or so later you receive the following reply directly from the office of the MOF.

It reads as follows:- “Thank you for bringing your tax concerns to my attention.” “Your income tax assessment for the year 2001 has been carefully reviewed and found to be in full compliance with the terms of Canada’s income tax legislation.” “Therefore you are advised to submit taxes levied in accordance with your present tax assessment to avoid incurring additional penalty.”
“You may apply for deferment of taxes levied on the taxable benefit portion of your tax assessment by completing form T1212 and submitting the form with your tax return.”

“Should you have other concerns in this regard I would welcome your further communication.”

Sincerely

(signed) John Bull, No. 1 Executive Assistant to the Minister of Finance.

So you bite the bullet, clean out your savings account and pay the taxes demanded.

A few years later you begin to see pre-election brochures and TV ads proclaiming: “STAND UP FOR CANADA” and that if elected the federal Conservative Party will introduce legislation to provide “Fair Taxation for All Canadians.”

So you “STAND UP FOR CANADA” and vote for the Conservative party in the 2006 federal election.

True to their pre-election promise the Conservatives delivered “Fair” taxation for 37 Canadians victimized by taxes -- levied on phantom income -- just the way you were.

Furthermore when asked by a journalist from the Victoria Times Colonist Newspaper if this “fair tax” action would be extended to other victimized taxpayers the Right Honourable Stephen Harper is quoted as saying: “We’ll get it resolved – it will take a change of code.”

When nothing happened by the year 2008 you decide to take your appeal -- for the promised “fair taxation” and justice -- to the “Tax Court of Canada” (TCC). And -- as advised in the TCC client information pages –- you hire a tax lawyer to present your appeal to the court.

In due course your case comes up and your lawyer does an outstanding job of describing the details of your past efforts to obtain fair taxation and he highlights the case of the 37 similar victims who had their taxes on phantom income, penalties and all cancelled by way of a Tax Remission Order (TRO).

The TCC justice hearing your appeal defers issuing his ruling for a few weeks and sets a future date at which time he will render his decision.

You have every right to expect your taxes levied on phantom income will also be cancelled and your money refunded in view of the fact the Conservative party has made a promise of “Fair” taxation for All Canadians and has set a precedent by already delivering on this promise to 37 victimized, honest, hard-working Canadains.

Finally the day of decision arrives. Accompanied by your lawyer you return to the Tax Court of Canada to receive the courts decision. You have already purchased a bottle of vintage Champaign to celebrate the end of your tax nightmare. Your lawyer assures you a favourable decision is almost a guaranteed certainty. The bottle of champagne may be all you have left to show for your efforts, after paying your legal fees, but you feel it is worth it to finally obtain justice and fair treatment.

The court justice begins handing down his decision with the words: “After careful review of the details of your appeal and consultation of similar rulings in similar cases I find that the Canada Revenue Agency has acted in full conformance of the law and therefore your appeal is denied.” “Case Closed.”

You and your lawyer stare in disbelief. How can you lose this appeal in view of the promises made by your elected government and the tax relief they have already delivered to other similar victims?

The answer is provided in the following report by Taxation Law@Gowlings, which can be viewed at:

http://www.gowlings.com/resources/enewsletters/taxationlaw/Htmfiles/V1N97_20070208.en.html

The following statements were made by TCC Chief Justice The Hon. Donald Bowman.

"In the wake of political pressure, the CRA has apparently relented from its initial refusal to grant relief to the affected JDS workers, and agreed to refund all taxes and interest paid. The natural reaction to this is, of course, "what about the rest of us?". A spokesperson for CRA has indicated that the CRA will not be granting such relief to other taxpayers who may find themselves in similar circumstances.
Most taxpayers would consider the CRA's stance on this issue to be patently unfair. However, absent further political pressure, or legislative amendment, taxpayers would probably be surprised to learn that Canadian courts have generally refused to recognize a duty of consistency on the part of the CRA in the course of administering and enforcing the Income Tax Act, and have expressly held that the CRA has no positive legal obligation to treat similarly situated taxpayers consistently.1 As stated by now Chief Justice Bowman of the Tax Court in Harvey v. The Queen:
The Minister's obligation is to assess in accordance with the law. It would throw the administration of taxation in this country into chaos if the Minister were bound by every private deal he made, whether in accordance with the law or not.2

Is immunity to the laws of Canada and freedom from personal attribute such as Honesty, Decency, Fairness, Integrity, Compassion, Dependability etc what you expect from your government?

If you are not happy to be lied to, deceived, and/or exposed to legalized extortion then you must take action.

Contact every Member of Parliament in your riding, including opposition MP’s and notify them in definite terms: “Commit to correcting Canada’s defective taxable benefit legislation to put an end to taxing honest, hard-working Canadians on money that never existed.” “And include provision to fairly compensate Canadians who have already been victimized in this way.” “The U.S.A. government has already corrected their defective “Alternative Minimum Tax (AMT) legislation and included provision to treat those victimized fairly.” Ref: www.reformamt.org

If the U.S.A. can take corrective “phantom income tax” action at this time – when their economy is much worse than Canada’s -- then what excuse does Canada have to perpetuate this unfair, unjust, outrageous tax policy?

Who needs a government staffed by elected individuals who have no sense of responsibility to their constituents and who blindly follow party policy that grossly abuses those who elected them?

I do not – and neither do you.

See you at the voting polls in the next federal election O’Grady.

Victor Drummond ©

CANADIAN VICTIMS..

CANADIAN-- PHANTOM INCOME TAX VICTIMS – NEED NOT APPLY

The Federal Conservative Party has made great promises to all Canadian citizens –
telling them many times and in many ways of the party’s “Action Plan” to provide “fair” and “equal” treatment under Canadian “Income Tax” laws.

In 2005, when the Federal Conservative Party (FCP) was still the “opposition” party in Canada’s House of Commons they spent a small fortune on media ads telling Canadian citizens how corrupt the Federal Liberal Party (FLP) was and how if elected to form Canada’s government they would make everything better.

They were going to crack down on Canada’s loose system of justice and get tough on repeat offenders.

They were going to introduce amendments to Canada’s personal and business taxation system – to bring fair and equal treatment – under Canada’s tax laws – to all honest, hard working Canadians.

They were going to: “enact legislation to ensure that full, just, and timely compensation will be paid to all persons who are deprived of personal or private property as a result of any federal government initiative, policy, process, regulation or legislation.” Reference “Conservative Party of Canada Federal Election Platform 2006” – “STAND UP FOR CANADA BROCHURE” page 43. “The Plan.”

On January 30, 2007, The Honourable James M. Flaherty, Minister of Finance, made the following statements while addressing the House of Commons, Standing Committee on Finance (FINA).

The Title of this address is:
“MINISTER OF FINANCE STANDS FIRM ON TAX FAIRNESS FOR ALL CANADIANS”
Ref: url: http://www.fin.gc.ca/n07/07-007-eng.asp

“Make no mistake, the decision that was taken on October 31st is all about fairness.”

“Fairness for Canadian taxpayers and their families who would be asked to pay more and more.”

“Fairness within the corporate sector, where the current rules give income trusts a tax advantage and distort investment decisions.”

Fairness for Canadian taxpayers, who are seeing tax dollars sent out of the country to foreign investors; and
Fairness for all Canadian governments, federal and provincial, who are experiencing a significant loss of tax revenue.”

And in his concluding remarks Flaherty said:

It is not tax fairness if it is only for a few.” “And it is not strengthening the economy if the playing field is not level for all businesses.”

So what about “Tax Fairness for all Canadians”?

The events -- surrounding and following the Tax Remission Order (TRO) requested by the Honourable Gary Lunn, CP, MP, for the riding of Saanich – Gulf Islands, British Columbia, prepared at the request of the Honourable Carol Skelton, CP, MP for the riding of Saskatoon-Rosetown-Biggar, Saskatchewan, and approved by The Right Honourable Stephen Harper, Prime Minister of Canada and also signed by Her Excellency Michaelle Jean, Canada’s governor General -- tell it the way it really is.

When signing this TRO her Excellency said: “I do so in the best interests of all Canadians.”

Many Canadians who were fortunate enough to have been employed in the communications field -- during the years of the Hi-Tech boom, i.e. 1985 to 1999 – were also unfortunate enough to have participated in the government sponsored “Fight the Brain-Drain” projects which supported corporations implementing “Incentive Share Option” (ISO), “ Employee Share Option” (ESO) and “Employee Share Purchase Plan” (ESPP) plans.

Both Canada and the United States of America (USA) enacted legislation to capture the taxes that would be generated by these ISO, programs while the shares of communications corporations were increasing in value on the worlds stock exchanges.

All went well until the Hi-Tech Stock Market Boom went BUST in mid year 2000. Then the defects in the USA “Alternative Minimum Tax” (AMT) legislation and the Canadian Taxable Benefits legislation (CTB) were triggered.

Honest, hard-working, taxpayers suddenly found they were being levied taxes on purely theoretical , might-have-been, money which generated tax levies that often exceeded the taxpayers gross annual income by as much as 1000 percent.

Individual victimized taxpayers in both Canada and the USA appealed for tax relief for years between the year 2001 and 2009 without success and grass-roots lobby groups sprang up in both country’s and began making organized appeals for tax fairness.

In Canada the Gary Lunn TRO was enacted and gave the promised “Fair” taxation relief to a total of 37 victimized Canadians. Our Prime Minister, The Right Honourable Stephen Harper, was quoted as saying: “we’ll get it resolved – it will take a change of code” when asked if the same tax relief would be extended to “All Canadians victimized in the same way.”

In October 2009 the USA government amended their defective AMT – revoked all related outstanding taxes and penalties and provided a means of fairly compensating American victims who had already paid taxes and/or penalties.

As of today Canadian victims -- of taxes levied on phantom income -- are still waiting for their tax on phantom income to be “resolved” and the promised “fair taxation for all Canadians” to be fulfilled.

Why?

After so much rhetoric on the issue of “Fair Taxation for all Canadians” by the government now in power?

What happened after our Honourable James M. Flaherty made the grand announcement of an “Updated Bill of Taxpayers Rights” in May 2007.

Nothing happened as far as Canadian victims of phantom income tax is concerned.

Why not?

Perhaps the answer to that question is to be found in the statements made by his Honour Judge Donald Bowman, a chief justice in “The Tax Court of Canada”, when asked about the Gary Lunn TRO.

Reference: http://www.gowlings.com/resources/enewsletters/taxationlaw/Htmfiles/V1N97_20070208.en.html

Justice Bowman is quoted in the Feb. 2007, issue 97, Taxation Law @ Gowlings, as saying:

“In the wake of political pressure, the CRA has apparently relented from its initial refusal to grant relief to the affected JDS workers, and agreed to refund all taxes and interest paid. The natural reaction to this is, of course, "what about the rest of us?". A spokesperson for CRA has indicated that the CRA will not be granting such relief to other taxpayers who may find themselves in similar circumstances.”

“Most taxpayers would consider the CRA's stance on this issue to be patently unfair. However, absent further political pressure, or legislative amendment, taxpayers would probably be surprised to learn that Canadian courts have generally refused to recognize a duty of consistency on the part of the CRA in the course of administering and enforcing the Income Tax Act, and have expressly held that the CRA has no positive legal obligation to treat similarly situated taxpayers consistently.1 As stated by now Chief Justice Bowman of the Tax Court in Harvey v. The Queen:”

“The Minister's obligation is to assess in accordance with the law. It would throw the administration of taxation in this country into chaos if the Minister were bound by every private deal he made, whether in accordance with the law or not.2”

Is this the same Justice Donald Bowman who declared in his ruling in the case of: “The executive that hates golf.” that: “where no benefit has actually been conveyed to the employee it does not matter what cost the employer expended to confer a benefit to the employee there is no benefit to tax.”?

There is a government document with the title: “Serving Canadians – Canada’s System of Justice”

Reference: http://www.justice.gc.ca/eng/dept-min/pub/just/img/courten.pdf

If Justice Donald Bowman is correct in saying: “Canadian courts have generally refused to recognize a duty of consistency on the part of the CRA in the course of administering and enforcing the Income Tax Act, and have expressly held that the CRA has no positive legal obligation to treat similarly situated taxpayers consistently.” then the document: “Serving Canadians – Canada’s System of Justice” is null and void and the Conservative Party Action Plan to provide “Fair and Equitable Taxation for All Canadians”, is a farce.

For Canadians -- who have been financially decimated by horrendous taxes on money never seen – to attempt to use Canada’s courts or the newly created “Taxpayers Ombudsman” to obtain “fair” tax treatment is a crap shoot.

When it comes to obtaining the promised: “Fair and equal treatment” under the tax laws of Canada" – victims of taxation on money never seen – NEED NOT APPLY.”

If Canadians really want the Government we all deserve then let your riding Member of Parliament know that you demand -- the victimization of fellow Canadians on the pretext of phantom income being a taxable benefit – be stopped NOW and our defective taxable benefit legislation be corrected to exclude equities “purchased” within an ISO, or ESO or ESPP be treated as a conventional stock purchase -- not as a taxable gift or award – which it never was and never will be.

See you at the voting polls in the next Federal Election O’Grady.

Victor Drummond ©

WHY SOME HEALTHY CANADIANS...

WHY SOME HEALTHY CANADIANS HOPE TO DIE
A commentary on the impact of Canada’s defective Income Tax Act relating to taxing of phantom income with tax deferral as an alternative to instant bankruptcy.

By Victor Drummond ©
December 2009

Within the few hundred honest, hard-working Canadians, who have contacted the group: “Canadians for Fair and Equitable Taxation” (CFET) I can name two that have crashed and burned financially because of the Canadian government’s unfair and unjust taxable benefit legislation.

They both had a well paying job during the Hi-Tech boom years, they bought their own homes, they saved money in RRSP’s and in personal savings accounts looking forward to the day they could retire and begin to enjoy the benefits of having worked steadily for 40, or more, years and raising a family.

Victim number (1) actually got to retire in the conventional way, with a retirement party, a parting gift or two and a decent golden handshake separation benefit. He also received his last allotment of Employee Shares Options (ESO) with a notice informing him that he could: (a) take the value of the underlying corporate shares in cash or (b) take the shares into his personal account for later disposition.

Before announcing his decision, on these equities, he asked a corporate ESO Plan Administrator to advise him on the tax implications of both choices.

He was advised, in writing, that the first ESO Plan administrator had consulted with a second of the corporate plan administrators and they both agreed the tax implications would be as follows: If he accepted the cash value now offered by the employer then the value of the payout would be treated as a “Capital Trade” and he would only be taxed on the actual profit (if any) at the capital gain’s inclusion rate for that year.

If, however, he elected to take the ESO option underlying shares and hold them in his personal account there would be no immediate tax implication. Taxes would only be applied if he realized a profit at the time he sold those shares and the taxes would be at the Capital Gains inclusion rate applicable in the year of sale.

Taking into consideration that at the time of retirement he had his normal 12 month salary, plus his separation benefit and to add another significant amount to his current gross income -- by accepting cash for his ESO shares -- would generate a huge one-time income tax levy. To avoid this happening he elected to take the underlying shares, into his personal account, and hold then for at least the next year.

Imagine his shock when in the following year his T4 arrived reporting his “Earned Income” the previous year was over $1,000,000.00 and his income tax levy was in the $250,000.00 range. This tax levy alone was over 300% of his gross earned income for the entire year.

Naturally he appealed to The Revenue Canada Agency (CRA) for a revised assessment that would base his income tax levy on his actual taxable income. His appeal was denied and the CRA politely explained his taxes were based on his deemed gain on the ESO shares he had received from his employer and was still holding.

The CRA also informed him he could defer the taxes levied on the ESO shares he had acquire that cost $100,000 or less in any specific year.

Even this tax deferment recourse was not fully explained, or perhaps misunderstood, because his initial perception of this option being that he would not be taxed until he sold the shares and then only if he realized a profit on those shares at the time of sale.

He made further inquiries and discovered the deferred tax would stand -- as initially levied – and become payable if he disposed of his shares, or moved out of Canada, or his employer went out of business.

Not long afterward his employer reported financial distress and filed for bankruptcy protection.

Now our honest, hard-working Canadian citizen began to have anxiety attacks and sleepless nights with the prospect of having his deferred taxes on phantom income come due and payable which would: (1) wipe out his RRSP and personal retirement savings, and (2) Force him to remortgage or sell his house and leave he and his wife to live on welfare for the rest of their retirement years if his pension, which was also now in jeopardy was lost.

After further research our victimized taxpayer discovered that should he pass away – due to natural causes -- while his tax deferment was still in effect then his estate would not be required to pay the deferred outstanding taxes on money he never saw.

His wife could then remain in their family home and receive the benefit of the RRSP and retirement savings they had planned to share before this outrageous unfair, unjustified tax was levied on their phantom income.

Although I do not have similar details of victim No (2) the fact that he also stated he hoped to die -- while his tax deferment was still in effect -- is a fairly good indication he is under the same duress as victim no (1).

Finding two Canadian taxpayers in this situation in the few dozen victims that have come to the notice of the CFET group is an indication there are likely a few hundred similar victims spread across Canada.

There is absolutely no excuse for even one, honest, hard-working, Canadian taxpayer to be abused in this manner.

Especially after the U.S.A. government has amended their Income Tax legislation (October 2009) to revoke taxes and related penalties levied on the phantom income of U.S. taxpayers.

Every true Canadian citizen should be outraged at this insidious tax trap which our high level bureaucrats insist is fair. They wouldn’t think so if they were the victim of their own tax policy.

Help bring relief to all Canadians caught in this tax trap by contacting all Members of Canada’s 40th Parliament and informing them you demand the following action:

(1) Canada’s defective taxable benefit legislation be corrected to put a stop to taxing phantom income – as the U.S. government has done.

(2) All Canadians who have outstanding deferred taxes levied on phantom income have to have these taxes revoked as was done for 37 victims per the Gary Lunn Tax Remission Order.

(3) All Canadians who have paid taxes on phantom income in the years 2000 to 2009 have their tax money refunded with interest at the income tax overpayment rate.


See you at the voting polls for the next federal election O’Grady.

Victor Drummond ©

WHAT DO YOU BELIEVE...

WHAT DO YOU BELIEVE?

There are still a few adult people who believe the world is flat.
And there are a lot of mature Canadians who believe the Honourable James M. Flaherty,Canada’s Minister of Finance,when he reiterates the taxing of Honest, Hard-Working Canadians,out of their lifetime savings, and/or homes, based upon fictitious income -- is “fair”.

Following is a summary of the real facts inherent in the taxing of “phantom income”
By Victor Drummond ©
November 2009

Our Honourable James M. Flaherty, Canada’s Minister of Finance, has declared on several occasions that Canada’s on-going policy of taxing phantom income is “fair” because:

(1) “The legislation has been on the Law-books for a long time which makes it a good law.” and
(2) “Taxpayers who hold their ESPP/ESO acquired equities past the date of exercise are treated the same as all other Canadian stock market investor/speculators.”

So let us examine those arguments:

(1) How many laws do you suppose -- that have been on the Canadian Law-Books a lot longer that our defective “taxable benefit” legislation -- that are now considered bad laws?

Laws pertaining to “Capital Punishment” are now in question – original laws have been amended.
Laws pertaining to “Abortion on demand” are now in question -- (as above)
Laws pertaining to “Same Sex Relationships” are now in question – (as above)
Laws pertaining to “Young Offenders” are now in question – with many already amended.
And these examples barely scratch the surface.

So if there is any relevance between the length of time a law has been on Canadian Law books it is: “The longer a law has been in use the more likely it is to be outdated and in need of updating.”

Argument (1) is “BUSTED”

===============================

(2) At what point -- in the tax process -- does the tax treatment of taxpayers who hold their ESPP/ESO acquired equities, past the date of exercise, become the same as the tax treatment of all other Canadian investor/speculators?

We will begin by listing the tax treatment of: “All other Canadian investor/speculators.”

Honest, hard-working citizens of civilized democracies such as Canada and: The United States of America: are able to buy and sell equities on a variety of established stock, commodity, and financial exchanges.

Using common shares and shares options contracts -- to make my point(s) – the following facts and comments apply.

Anyone who can meet the age and financial requirements of a stock broker may open an account that allows them to buy, sell, and/or short-sell the above named equities.

Buy/sell, and/or short-sell, orders can be placed with your broker in person, or by phone, or via, an on-line computer.

Once an investor has established a broker account and has equities, and/or cash, deposited in their account they may then be extended the option of trading additional equities on “margin”.

Margin buying/selling of equities carries additional risks along with the advantage of providing leverage to increase potential gain.

Fact (a) No matter how many shares you buy, from your broker, or what price you pay for those shares there is no “income tax” implication so long as you do not sell, trade or liquidate any of your holdings or collect interest or dividends from them.

Purchased equities remain in your account -- which is also known as your “portfolio”-- tax free indefinitely.

Regardless of whether the value of your portfolio increases, or decreases, or stays the same – as long as you are merely holding equities in it -- there are no tax implications.

Fact (b) It makes absolutely no difference if you happen to be an employee of the broker you are buying and selling these equities through -- so long as the equities are not shares in your employers organization offered to you via an Employee Shares Purchase Plan, (ESPP) or an Incentive Shares Options (ISO/ESO) agreement.

Fact (c) It makes absolutely no difference if your broker-employer sold you the equities you purchased at the market high, or the market low, for the day. Any difference between the actual cost to you and the deemed Fair Market Value (FMV) of those same shares does not generate any tax implications. The price you pay for your equity buy(s) only relate to your Adjusted Cost Base (ACB) of each specific purchased equity.

Fact (d)At tax time, each year, your broker will provide the Canada Revenue Agency (CRA) a summary of your equity trades during the previous year -- complete with the type/class of each equity traded, the trade volume, the price received/paid per equity unit -- the gross value of the trade and any commission or foreign exchange paid/received.

Fact (e)When you prepare your “Income” Tax Return you report the details of all CLOSING equity trades on the S3 --S3-Supplement form of your Income Tax Return.

A CLOSING trade is the combination of the buy and sell transactions involving the same equity.

Equity’s that expire or consolidate/split shares, and/or change their name are tracked in order to accurately report the ACB and final loss/gain on the closing trade.

On your S3 – S3 Supplement you identify the type/class of equity, i.e. Common or Preferred Shares, or Put or Call Option, the volume of the equities traded, the ACB, the gross value of the trade – other costs or expenses and finally the years net Loss or Gain.

Fact (f)If you have a loss to report – then you may apply this loss against any Capital gain on which you paid tax -- at the Capital Gains inclusion rate -- in the last three years. Or you may carry the loss forward indefinitely -- to be applied against any future capital gain.

Conversely if you have a net gain to report, and no offsetting Loss, then this gain is added to your “income” – at the current Capital Gains Inclusion rate – and you pay tax on this profit.

Fact (g)Only closing trades are reported on the S3 -- S3-Supplemnt Tax form and all other equities still held by you, the investor/speculator, remain in your portfolio indefinitely with zero tax implications as per Fact (a).

There is no issue with the “income tax” regulations as stated in the foregoing investment tax policy facts (a to g). Where no monetary gain has been received -- no tax is levied.

Up to this point Canadians have a “fair” and “equitable” income tax system and tax policy.

===================================

The CRA has a different rationale they apply to tax “fictional earned income”, i.e. when you buy equities from your employer via an ESPP and/or an ESO/ISO.

Then the CRA levies a tax on any "theoretical" gain you might have realized -- at the moment your ESPP/ESO purchased equities are delivered to your account -- even though these equities are still in your portfolio -- and no closing trade has yet taken place. You have not yet realized one red cent of actual income.

Is this change of tax policy justified?
Has it been, or can it ever be, applied fairly and equitably?

Here are the facts – and you be the judge.

Fact (h) Equities offered employees per an ESPP and/or an ESO are “purchased” by the employee with their own after tax dollars.
No gift or award has been bestowed on the employee by the employer.

Fact (i)Equities offered by an employer, per an ESPP/ESO agreement, may be offered at a discount below the deemed FMV of those shares as traded on a conventional stock
exchange.

Where the buyer acquires ESPP/ESO equities at a discount (typically 15%)the CRA deems this 15% difference may become a component of a taxable benefit.
(Fact (c) is applicable to “All other Canadian investor/speculators” -- but not to the holders of ESPP/ESO equities.)

Fact (j)There is normally a significant delay between the time an employee agrees to purchase shares under an ESPP/ESO agreement and the beginning of the delivery date(s)(exercise dates). This time delay may range from months to years during which time the buyer (employee) has no control over the equities being purchased.

By comparison equities purchased by way of a conventional broker are delivered immediately and the buyer has full control over these equities until they are liquidated.

Fact (k)Although you have not received so much as one red cent, in hard cash, you are taxed on any theoretical gain your ESPP/ESO purchased shares might have produced had you sold them at the moment you received them from your employer.
i.e. The “exercise” date. (This treatment is unique to ESPP/ESO taxpayers.)

When a theoretical profit is possible, at the moment of “exercise”, it is “deemed” by the CRA to be a “taxable benefit”. Even though no tangible money has actually changed hands. (This treatment is unique to ESPP/ESO taxpayers.)

Note:(1)During the stock market boom years – 1985 to 2000 – this tax policy caused no problem for you as your ESPP/ESO equities went up in value almost daily. Victims of taxes levied on “deemed” earned income could easily duplicate the dollar value that fictitious income by selling sufficient shares to pay the tax.

When the stock market boom went bust in mid year 2000 victims of taxes levied on phantom income could no longer actually realize the deemed “earned income” as the value of the shares held had fallen below the level of the taxes levied on them.

Note (2)During those same boom years the government of Canada encouraged Canadian Hi-Tech Corporations to offer their key employees Incentive Shares/Options purchase plans as a means of increasing employee loyalty. and productivity and as a method to reduce the level of technical people being enticed to switch employers and leave Canada. i.e. Fighting the so-called “Brain Drain”.

Government and Corporate ESPP/ESO brochures during those years encouraged employees to participate in these incentive plans as investors in Canada’s future.

There was no mention that these “investments” could be classed as a taxable benefit that could end up leaving you -- the employee -- financially devastated.

Fact (l)Although the ESPP/ESO acquired equities, (with a theoretical gain), are “deemed” to be a “taxable benefit” at the moment they are exercised. they somehow morph into Capital equities if these same items are later sold at a loss.
(This treatment is unique to ESPP/ESO taxpayers.)

Now regarding James M. Flaherty’s argument (2) “Taxpayers who hold their ESPP/ESO acquired equities past the date of exercise are treated the same as all other Canadian stock market investor/speculators.”

The point at which this argument becomes true is after the ESPP/ESO tax victims have been processed per Facts (h through l). At that point they have already been financially exploited.

Therefore argument (2) is also BUSTED. Taxing anyone on money that never existed is NOT FAIR OR JUSTIFIABLE Mr. Flaherty – and you know it.

==================================

The U.S.A. congress also knows that taxing phantom income is unfair and that is why the amended their comparable “Alternative Minimum Tax” (AMT) legislation to put and end to this tax policy.
Ref. www.reformamt.org

Over 400 Canadians who have signed the CFET petition do not believe taxing phantom income is “Fair” Ref. www.cfet.ca (petition).

Our Right Honourable Stephen Harper, Prime Minister of Canada, doesn’t believe taxing Canadians on phantom income is “fair” or he would never have approved the Gary Lunn Tax Remission Order (TRO) revoking this tax and related penalties for a paltry 37 victims in Saanich – Gulf Islands British Columbia.

Her Excellency, The Right Honourable Micheal Jean, Governor General for Canada doesn’t believe the taxing of Canadians on phantom income is “fair” as evidenced by her signing the Gary Lunn TRO and saying: “ I do so in the best interest of All Canadians”.

==================================

Fact (m)The recourse open to you, as a victim of this taxable benefit tax trap, consist of the following:

(1) You can apply to your local Canada Revenue Office – Chief of Appeals Officer for a reassessment of your “Income Taxes”. These direct appeals are typically denied.

According to a report by the Federal Auditor General, in 2008, the prospect of you receiving a favourable decision using this approach depends as much, or more, upon the location where you submit your appeal as it does upon the merits of your case.

(2) You can hire a lawyer and appeal to the “Tax Court of Canada” (TCC) to have your case decided by a judge’s decision.

The greater majority of phantom income tax victims who have tried this avenue have ended up having their appeal denied – on the grounds that no laws have been broken -- and those victims who tried this avenue have usually found they have only sent good money after bad.

(3) You may apply to have your taxes reduced, or revoked, on the basis of being in financial distress and you are eligible to be treated as a “hardship case”.

Do you believe allowing financial hardship situations to be a factor in the reduction, or cancellation, of “Income taxes” is fair to all Canadians?

Or does this avenue of tax remission merely reward the spendthrift and penalize the thrifty?

Fact (n)Both the Right Honourable Paul Martin, former Prime Minister of Canada, and the Right Honourable Stephen Harper, Canada’s current Prime Minister made public commitments to correct the phantom tax problem. Paul Martin is reported in the Victoria Times Colonist Newspaper as saying: “We’ll fix it” when asked what he intended to do about the taxing of Canadians on money never seen?

Then following the Gary Lunn “Tax Remission Order” (TRO) Stephen Harper is quoted as saying: “We’ll get it resolved - it will take a change of code.” when asked if the same tax relief would be provided to all Canadians caught in the same tax trap.

As of November 2009 the problem has not been “fixed” or “resolved” and the “code” remains unchanged.

Did either Prime Minister ever say they failed to take the promised corrective action because they believe the taxing of phantom income to be “fair”?

The answer is “No.”
Why? Because they know it is unfair and unjust.

The foregoing bogus arguments put forward by our government authorities are deliberately slanted to deceive the average Canadian into believing something they do not believe themselves. i.e. “that the Canadian policy of taxing honest, hard-working Canadians on “income” money that never existed – is “fair” and justified.”

I do not believe it is “fair” and neither should you.

===============================

The means to make the taxation of ESPP/ESO/ISO acquired equities truly “fair” and “justified” is very simple and straightforward.

Simply remove ESPP/ESO/ISO acquired equities from the “taxable benefit” classification and place them in the “Capital Equity” classification where they rightfully belong.

Compensate those victims who have already paid, or deferred, taxes on phantom income as the U.S.A. government is doing.

Then all Canadian investor/speculators will really be provided the same tax treatment making Minister Flaherty’s argument No. (2) TRUE and Canada’s “income” tax legislation “fair” at last.

See you at the voting polls in the next federal election O’Grady.

Victor Drummond ©

WHY AMERICANS HAVE MORE..

WHY AMERICANS HAVE MORE TO BE THANKFUL FOR
A commentary on reasons to be “Thankful” in 2009 for Canadians
as compared to our U.S.A. cousins.
by Victor Drummond ©
November 2009

United States citizens collectively speaking have a lot more to be thankful for this thanksgiving than do Canadians.

They have a government that has finally recognized the truth, regarding taxing phantom income, and has taken costly corrective action -- in spite of facing the largest budget deficit of all G20 countries.

It took nearly a decade for the U.S. grass-roots lobby groups “Reform AMT” and “The Coalition for Fair Taxation” (CFT) to finally achieve true representation from their elected congressmen but once that recognition was achieved the U.S. Congress passed the required bills to amend their flawed “Alternative Minimum Tax” (AMT) thereby putting an end to the outrageous taxing of income that only existed in a corrupt rationale, i.e. a rationale that provided an excuse to tax phantom income.

Furthermore the U.S. government passed additional legislation to provide reasonable compensation to those American taxpayers that had already been victimized by this outrageous tax policy.

There may be a few Americans – with a vested interest in keeping the phantom income tax policy as it was – that will still argue in favour of extorting a taxpayers lifetime savings and even expelling them from their homes is justified in order to pay this tax. They also believe they are justified in operating ponzi schemes and swindling as many honest, trusting, fellow Americans as they can – because they can.

The United States and Canadian Societies can get along just fine without these self-serving swindlers.

We all know those who have had their tax levy and related penalties on phantom income revoked – have much more to be thankful for this year -- and so do all U.S. Citizens – especially the unemployed.

The right to be free of taxation of phantom income has been restored for all U.S. taxpayers.
And the billions of tax dollars that are being refunded to victimized taxpayers under the reformed AMT legislation are just as effective in fighting the economic downturn as are all the bail-out billions being given to the automotive giants and major financial institutions.

Instead of being left financially destitute and/or homeless these former victims of outrageous, unjustified taxation now have discretionary funds to apply to buying a subsidized new car or paying down the mortgage on their home. These are essential factors in the recovery of the U.S. and world economy.

Keep these factors in mind Americans when summarizing things to give thanks for in 2009.

By comparison the Canadian government has adopted a deny and hide policy when it comes to dealing with Canadian victims of our equally defective taxable benefit legislation.

Canadian victims of taxation -- on money never seen -- began appealing to their government for fair taxation as soon as the downturn in the Hi-Tech market in mid July of the year 2000 triggered the defect in the taxable benefit legislation.

The government of the day – under the Right Honourable Paul Martin – Prime Minister struggled with this issue and might have acknowledged the policy of taxing fictitious income was wrong had it not been for the fact the government needed all the money it could lay it’s hands on to buy off the Quebec Separatists and pay-off the government Ad-Scam commitments, the gun registry and the sports fiasco.

The fact the U.S. government was still applying their flawed AMT legislation and taxing U.S. citizens on phantom income, at that time, was likely another factor in the decision the Canadian government made when they decided to keep taxing Canadians on money never seen.

So instead of correcting the problem the Paul Martin Government quickly altered their support of the Canadian Employee Incentive Shares Purchase Plans and began to describe these plans as “Income Supplements” which could generate taxable income at the time of delivery.

Prior to the year 2000 these employee incentive plans were described as government approved schemes to help increase employee, loyalty and productivity, by providing key employees an opportunity to “invest” in their employer’s organization.

I even have a copy of a document provided to an employee of the Nortel Networks -- by the Corporation ESO Plan administrator – that assures the employee: “he will only be taxed on the gain (if any) they realize at the time they sell their ESO Shares.”

So at that point in time (2001) the Canadian government SET A TAX TRAP for thousands of ordinary Canadian citizens that had never been warned they could lose their life savings, and possibly their homes as well, if they did not sell their ESPP/ESO equities at the very moment they received control over them.

No doubt a few of the victimized Canadians appealed their plight to MP’s in the House of Commons (HOC) that were members of the Conservative Party.

This possibility is supported by the fact the federal Conservative Party constructed a whole series of “Action plans” which they assembled into a pre-election campaign brochure titled: “STAND UP FOR CANADA”.

There are dozens of “Action plan” topics in the 2006 “STAND UP FOR CANADA” brochure – not the least of which is the promise to provide a system of “fair” taxation for “All Canadians” if elected.

So in February 2006 the federal Conservative Party was elected to form Canada’s government with a minority of seats in the HOC.

The Right Honourable Stephen Harper wasted no time in taking action to keep the party commitment to provide fair taxation for: “All Canadians”.

That may have been his initial intent when Harper approved a Tax Remission Order (TRO) for 37 Canadians victimized by the “phantom income” tax fiasco but it seems the road to HELL is really paved with same.

Although Harper was quoted as saying: “We’ll get it resolved” and “it will take a change of code.” when asked by a reporter from the Victoria Times Colonist Newspaper if this TRO would be applied to all similar victims of phantom income taxation – so far all he has done, since making those commitments, is stonewall the issue.

Harper’s about face on his commitment to implement the “Action plan” to provide fair taxation for All Canadians” has left thousands of honest, hard-working Canadians to face financial ruin, loss of homes and
peace of mind.

There have been a myriad of important international as well as domestic issues the government can use, and has used to push the issue of taxing Canadians into poverty status -- off the media radar screen.

Of course it is far more important to make good-will tours to potential trade countries such as India and China than it is to protect your own citizens from financial ruin.

Even the U.S. President, Barak Obama, has arranged such trips to improve trade relations. The big difference being his trips come after the relief of American taxpayers from the distress of taxation on money never seen.

On the other hand the Harper regime has slipped from the pedestal many Canadians had placed them on.

By reneging on the promise to implement fair taxation for all Canadians, they have shown themselves to be short on honesty and decency.

By introducing a sham Taxpayers Ombudsman together with a hollow updated Bill of Taxpayers Rights they have shown themselves to be deceitful.

By not upholding the provisions of the government document: “Serving Canadians – Canada’s System of Justice” and allowing the assumption of guilty until proven innocent to replace the “fair laws” and assumption of innocent until proven guilty as declared in that document our present government has shown itself to be weak and ineffective.

Although both country’s have been struck by severe natural disasters in 2009 such as floods, tornado’s, and devastating fires, the average American has much more to be thankful for than does the average Canadian.

At least those elected to serve, and protect the best interests of their constituents, in the U.S.A. , are earning their taxpayer based salaries and perks.

Have a great Thanksgiving cousins.

See you at the next federal election voting polls O’Grady

Victor Drummond ©

IT COULDNT HAPPEN TO ..

IT COULDN’T HAPPEN TO A NICER GUY
A commentary on the belief that people get what they give
i.e. What goes around comes around.
By Victor Drummond ©
November 2009


Doesn’t it seem odd that the big publicity moments our Right Honourable Stephen Harper, Prime Minister of Canada participates in seem to often include a blooper or two?

Remember the two group photo’s of the world Financial leaders our PM was supposed to be present when the pictures were taken. Missing one may be understandable – it could happen to anyone who wasn’t paying attention to their surroundings BUT twice! That’s stretching co-incidence to the limit.

What about the recent grand entrance to the Mumbia, India Bollywood dance studio when Harper failed to see a step and almost did a pratfall on camera. This might happen to anyone – right?

Then there was the big moment when Harper is on camera negotiating with high level Indian government officials on the sale of Canadian Uranium to India for peaceful use in nuclear power plants.

Just at the climax of this momentous occasion an Indian official declared there is a high level security alert in effect to protect India’s nuclear power plants from perceived mass attacks by terrorists.

How is that for taking the wind out of Harper’s sails.

The grand finally to this public relations disaster is the revelation that earlier terrorist attacks in Mumbia might have been planned and executed by a person holding Canadian citizenship.

Could all these screw-ups and miscues be payback for something our Right Honourable Prime Minister did, or didn’t do, that offended the higher powers?

What about making a commitment to relieve the stress and financial devastation of taxes on phantom income, i.e. money never seen by the victimized Canadian Taxpayer and then turning his back on those same victimized citizens.

Is it possible the curses levelled at our PM for that treacherous act are having this negative effect on his: “get more and better publicity efforts”?

If I were the least bit superstitious – I would be inclined to believe so.

One or two screw-ups in a series of publicity schemes might be considered average but the things that have been going wrong for our PM are far above average.

If I were the Right Honourable Stephen Harper I would try keeping my word to correct Canada’s defective taxable benefit legislation, as promised, and see if future publicity attempts do not go as planned.

I am sure things that have messed up Harpers big moments so far -- Couldn’t happen to a nicer guy.

See you at the voting polls during the next federal election O’Grady.

Victor Drummond ©

WHERE WOULD THE MONEY BE..

WHERE DO YOU SUPPOSE THE MONEY WOULD BE NOW
A commentary on the attempted robbery of the Legion Poppy Fund on November 12 2009 – at Legion Branch No. 73.

By Victor Drummond ©
November 2009

On November 12 2009 – the day after veterans day – volunteer veterans were busy counting the money -- collected through the Veterans Poppy drive -- in the board room of the Oak Ridge Legion, Branch No. 73.

A stranger, who had entered by way of a side door, walked into the board room and stood momentarily in front of the members counting the money.

Navy veteran, 84 year old, John Dietsch, asked the man what was he doing here? At that point the stranger brandished a gun and said: “give me all your bills.”

Without a moments hesitation John lunged at the man and attempted to seize his gun arm. The stranger pushed John back and began to back away. At that point 64 year old volunteer, Earl Gray, took after the stranger, caught him momentarily but the stranger managed to break free and took off.

Earl followed the stranger up to the point where the would be robber disappeared down a street where Earl could no longer follow or see him.

It is impossible to imagine that when John Dietsch saw the stranger holding a gun that warning bells didn’t go off in his head telling him that any action – other than that demanded by the gunman -- was setting an extremely dangerous string of events in motion.

If John had followed the example set by the Right Honourable Stephen Harper -- when Harper was warned by Senior Bureaucrats in the Department of Finance and the Canada Revenue Agency (CRA) that his approval of the Gary Lunn Tax Remission Order (TRO) was setting a dangerous precedent – where do you suppose the poppy fund money would be today? Gone – that’s where.

When Harper decided to do an about face and break his word to “get it resolved” his life was not in danger.

The only risk he faced -- by keeping his word -- being that his reputation as a fair minded and self assured, decent, trustworthy, capable leader would become more creditable.

By reneging on his commitment to "resolve" the tax on phantom income Harper showed himself to be uncertain of his convictions and lacking confidence in his ability to give and keep his word.

Consequently thousands of honest, hard-working Canadians are still being financially ruined and spend anxious days and nights burdened with taxes levied on money never seen.

As Legion volunteer Earl Gray remarked when the Poppy fund robbery was foiled: “If the robbery had of succeeded a lot of people who are receiving this money would have been out of luck.”

Just like the thousands of honest, hard-working Canadians who depended on the Right Honourable Stephen Harper to keep his word to: “get it resolved are still "out of luck."

The time has come for Canadians to Stand up for their victimized fellow Canadians. The action plan is simple.

Every Canadian of voting age should contact their local Member of Parliament, either in person, by letter , by telephone and/or by e-mail demanding the defective Canadian taxable benefit legislation be amended to put an end to taxing honest, hard-working Canadians on money never seen.

The U.S. Government have already amended their defective tax legislation putting an end to taxing phantom income and have also put a system of victim compensation in place.

And as the U.S. Government has done when they amended their flawed “Alternative Minimum Tax” (AMT) legislation the Canadian government should include fair compensating to those Canadians who have already paid those unfair, unwarrented taxes and/or penalties.

Now: in view of the U.S. government action there is no excuse for Canada's government not doing the same for our victimized Canadians.

See you at the voting polls in the next Federal election O’Grady.

Victor Drummond ©

A VETERANS THOUGHTS...

A VETERANS THOUGHTS ON VETERANS DAY
November 11 2009-11-09

By Victor Drummond ©

On Monday November 9, 2009 the Toronto Globe and Mail Newspaper featured a political article with the title: “Harper marks communism’s point of no return.”

He is referring to the day the Berlin Wall came down and Germany was re-established as a unified nation – November 9 1989. On that day freedom and equality were greatly improved for all Germans living in East and West Germany.

And I am willing to bet Harper can recall the day, to the very minute, the Canadian “STONEWALL” went up blocking all further official response to appeals -- by Canadian victims of Canada’s defective taxable benefit legislation and it's application policy -- for treatment equal to that given 37 similar victims in Saanich British Columbia.

Even appeals sent -- to all levels of Canada’s government -- by the non-profit group: “Canadians for Fair and Equitable Taxation” (CFET), pleading for equal treatment under the law and fair taxation by our government – have been stonewalled all through the years 2008 and 2009.

Prior to the 2006 Federal Election – while the federal conservative party was the official opposition – the party slogan was: “STAND UP FOR CANADA” with a whole series of “Action Plans” which they said were going to provide “Fair” and “Equitable Taxation” for all Canadians.

Then after the Conservatives were elected to power they wasted no time in seeming to fulfill that promise by the speedy passing of a Tax Remission Order (TRO) that revoked the tax on “earned income” that was neither “earned” nor “income” of any kind.

It was money never seen by those victimized by Canada’s defective taxable benefit legislation and application policy. It was a tax levied on a deemed gain as of an arbitrary moment in time. i.e. phantom income.

When the Gary Lunn TRO was announced thousands of Canadians, victimized by the same tax fiasco, cheered and rightfully expected the Right Honourable Stephen Harper to fulfill his commitment to “resolve the problem” as he was quoted per an article published in the Victoria Times Colonist Newspaper at that time.

Unfortunately our Prime Minister is not as good as his word.

On, or about, December 7th 2007 The Victoria times Colonist published another article under the title: “JDS deal dangerous precedent, Ottawa told.”

The text of the article relates how the Gary Lunn TRO was approved by cabinet despite OBJECTIONS from officials at Finance and Canada Revenue Agency (CRA).

“Senior bureaucrats warned such a decision was unfair to other taxpayers and set a dangerous precedent for employees of other high-tech who watched their fortunes rise and fall during the dot-com boom and subsequent crash.”

Very apparently senior bureaucrats in the office of the Minister of Finance and in the CRA are not the least bit interested in the level of fairness of their tax policies. It is obvious that all they care about is getting their hands on every tax dollar the law will allow.

So Mr. Harper did an abrupt about face and the Canadian “Stonewall” went up suddenly on, or about, December 7 2007.

Canada’s Stonewall is every bit as insidious, as was the Berlin Wall, when it comes to disrupting citizens rights, and freedoms.

If, as Mr. Harper was quoted in the Globe and Mail Article regarding the Berlin Wall coming down: “It will honour the men and women of the Canadian Forces who served during that confrontation.”

Then what does the raising of a rights and freedoms “STONEWALL” in Canada say about the dishonor imposed on every Canadian military person who thought they were fighting for a fair and honourable government?

As a veteran of WWII I can tell you I feel betrayed and I believe so would every WWII veteran who becomes fully apprised of the tax -- on phantom income -- events from the year 2000 to date.

Every Canadian is entitled to equal treatment under Canadian Law, as declared in the recently updated "Taxpayers Bill of Rights".

Appeals from victims, of taxes levied on money never seen, have been -- and still are being -- denied this right by the very person who loudly proclaimed the introduction of that bill in Toronto’s historic Dominion Public Building in mid May 2007. None other than "The Hon" James Flaherty, Minister of Finance.

I have no use for hypocrites. Especially those who display such a low opinion of other Canadians as to attempt mass deception.

The updated “Taxpayers Bill of Rights” co-announced with the creation of a new government officer with the title: “Taxpayers Ombudsman” was nothing more than a publicity stunt intended to create the impression the Taxpayers Ombudsman has the authority to enforce the terms contained in the Taxpayers Bill of Rights.

Nothing could be further from the truth. The office of the Taxpayers Ombudsman is a sub-division of the Canada Revenue Agency (CRA) and the ombudsman has absolutely no power of enforcement of any kind. (An expensive farce on the Canadian Taxpayer)

If Canadians -- who felt called upon to participate in Canada’s Military Forces – back in the 1940’s had reacted like our Right Honourable Prime Minister -- to warnings their decision to defend Canada is a dangerous act -- I wonder what Canada’s contribution to the war effort would have looked like?

After a few convoy ships were sunk would Canada have had a viable merchant marine force?

After a few aircraft were shot down would we have had a Canadian Air force?

After a few armoured cars and/or tanks were blown up would we have had an armoured Corps.

Canadians had an alternative to risking their lives by not going General Service (Active Service) during the call to arms in the 1940’s. They could have opted to join Canada’s Home Guard Military Forces and been relatively safe from enemy action. Safe, that is, until the enemy arrived on North American shores.

I see the Home Guard option as being the equivalent of our Right Honourable Prime Minister doing an about face and failing to fulfill his commitment “to resolve the problem” and provide “Fair” and “Equitable Taxation” for all Canadians as promised in the 2006 conservative “STAND UP FOR CANADA” Action Plans.

Today I will wear my Poppy proudly and thank those who risked their lives in all our conflicts, to preserve Canadian social values, integrity, honesty, courage, dignity and above all fairness.

But I won’t watch spineless hypocrites, on TV, paying lip-service to real Canadians while maintaining Canada’s STONEWALL policy on the issue of fair taxation -- all the while ignoring the financial distress this policy has, and still is, wreaking on honest, hard-working Canadians.

See you at the voting polls in the next federal election O’Grady.

Victor Drummond ©

WHAT WILL IT..

WHAT WILL IT TAKE ?
What level of incompetence, indifference, lack of integrity, honesty, decency,
and/or lack of voter representation will it take before the average Canadian voter says: “No-more.”? “Deliver what you’re being paid to do – or you’re gone.”

When will the average Canadian voter stand up and say: “I demand at least an acceptable level of representation and performance for the billions of tax dollars obviously wasted on a gang of bungling incompetents.”

A commentary on the dismal performance of Canada’s government since the year 2000.
by Victor Drummond ©
November 2009 – during Veteran’s Week.

Back in the year 2003 when I first discovered that thousands of honest, hard-working, Canadians were being taxed into financial ruin -- on the pretext their employer had bestowed upon them a tangible taxable benefit – I was initially mildly disappointed.

My initial thoughts being that Canadians had the best government in the world and as soon as this very un-Canadian abuse of taxpayers could be brought to the attention of our tax administrators the problem would be history.

Then I discovered that not only had the problem been drawn to the attention of federal government authorities -- all the way up to the Prime Minister – ( The Right Honourable Paul Martin) not once, or twice but at least a dozen times – with the same bafflegab response each time. “Not my problem will refer to someone else…”

Mild disappointment progressed to absolute disdain for those who would deliberately misuse their power to enforce a tax policy that was so obviously nothing more than an extortionist type money-grab based upon a defective, self-serving, tax rationale.

It doesn’t take a rocket scientist to reach the conclusion that applying a devastating tax against an unrealized, intangible, income does not compute, is not justified, and amounts to nothing more or less than legal extortion.

There is no excuse, or justification, for pretending there is a difference in the transactions when one person buys shares in corporation AB from a broker, and another buys the same type and quantity of shares from their employer? The key word is “BUYS”. A purchase is NEITHER A GIFT NOR AN AWARD.

It makes no tangible difference if the purchase cost to the buyer is at the market high of the day or the market low of the day, or at a discount from the deemed FMV, at the time the shares are purchased. Until an item PURCHASED is sold, or traded, for something of greater value there is no tangible (taxable) gain.

All the buyer has to show for their spent, after tax, dollars is a block of shares in corporation AB and there is no material difference if the shares are purchased directly from a broker or from an employer.

The Canadian Taxable Benefit Legislation, as presented in the document “Employer’s Guide To Taxable Benefits” (T4130 Rev 8 (E)), presents some bafflegab intended to lead the reader to believe an employee has received some form of gift or award when they are given an opportunity to participate in their employer’s “Employee Shares Purchase Plans” (ESPP’s) or “Employee Share Option” (ESO) agreement(s).

There are also some remarks, in T4130, that imply the ESPP/ESO participating employees receive a benefit, of sorts, when the cost price to the employee is below the “Fair Market Value” (FMV) of the same shares trading on a conventional stock exchange.

This a deliberately misleading implication. The employer has sold the employee shares with no guarantee the shares will have any dollar value when delivered (exercised), or at any time in the future.
It is a straight investment gamble on the part of the employee the same as though the shares were purchased from a conventional stock market broker.

Stock market shares are not a “near-cash” item. The have no face value, they have no assured dollar value – not even by the issuing corporation. All anyone need do to prove that even former blue chip shares are nothing near a cash equivalent is to try and sell their Nortel Network shares – if they have any.

The pattern of taxing fictitious income, set by the federal Liberal government during the years 2000 to 2005, may have inspired the federal conservative party to include tax reform and fair taxation for all Canadians in their “STAND UP FOR CANADA” 2005 -6 pre-election campaign.

In any event the federal liberal party deservedly lost that election due to gross mismanagement of Canadian Financial affairs.

Once the Federal Conservative Party was elected, even with a minority government, The Hon Gary Lunn, CP. MP for the riding of Saanich, Gulf-Islands, British Columbia went right to work to have the devastating taxes levied the fictitious taxable benefit incomes of 37 former employees of the SDL Optics (JDS Uniphase) revoked via a Tax Remission Order (TRO)

This event was widely publicized and comments were attributed to both the Hon Gary Lunn and the Right Honourable Stephen Harper, Prime Minister of Canada to the effect this kind of corrective tax reform would be applied across Canada and all similar victims of taxation on income never seen would be provided similar tax relief.

Obviously the integrity of our Right Honourable Prime Minister has it’s dollar value as Mr Harper has remained tight lipped on this issue ever since.

Canada’s government spends a lot of money on advisors and consultants relating to every aspect of government activity – especially social services such as Health and Welfare and Finance.

Even with the best expert counselling -- that money can buy-- things do jump the track once in a while and the government ends up with egg on their face. When the public can see that their elected representatives have taken reasonable measures to assure a desired outcome they are usually understanding and leave it to the opposition leaders, critics etc. to blow the whistle on the goof-up.

What excuse is their for a Minister of Finance to ignore the advice of the House of Commons (HOC) Standing Committee on finance (FINA) which passed a motion, last August, recommending the appeals of the Canadian Grass-Roots Group, “Canadians for Fair and Equitable Taxation” (CFET) be heard by the MOF?

Recently a member of CFET, who had made several written requests to meet with the MOF as proposed by James Rajotte – chairman of FINA – received a written reply from the office of the MOF stating in no uncertain terms the MOF does not have time to meet with members of CFET – now and at no time in the foreseeable future.

This is the same MOF who declares Canada’s taxable benefit legislation is being applied “fairly” while he is staring the Gary Lunn TRO event right in the eye. He also blithely ignores the fact the U.S. government has declared the taxing of phantom income is definitely unfair and totally unjustified.

This glaring contradiction indicates our MOF has little, or no, concept of “equal treatment under the law” and has no concept of the conventional meaning of the word “fair” and/or no regard for telling the truth.

There is, however much more damming evidence that indicates our MOF is not the competent minister Canadians have a right to expect for the tax dollars he is receiving in salary and perks.

An astute financial person should have recognized the signs of a coming major economic event when the Hi-Tech stock market went in a steep decline in the middle of the year 2000.

Paul Martin, MOF at that time, apparently didn’t see it coming, and neither did his successor the Hon Ralph Goodale.

All they saw was an opportunity to extort after tax dollars from thousands of honest, hard-working employees who had been duped into speculating in the stock market by both their employers and Canada’s federal government.

When Incentive Shares Options (ISO) plans were introduced -- as a means of fighting the loss of key people through the actions of Head-Hunter organizations – both employers and the government made no mention that flash paper gains --whether realized or not – would be taxed at the potential profit the taxpayer might have received IF they had sold their shares at the moment in time they actually received them.

In fact there is evidence some ISO Plan administrators actually assured their co-workers they would only be taxed on the gain, if any, realized at the time they actually sold their shares. That is the tax treatment provided to any other Canadian who invests in conventional stock market equities and IT IS THE ONLY “FAIR” SYSTEM OF TAXING EQUITIES.

How can the Hon James M. Flaherty keep a straight face when he declares: “the policy of taxing phantom income is “fair” because people who hold their ESPP/ESO equities past the date of “exercise” are treated the same as all other investors.”

After they have been levied horrendous taxes on money that never actually existed THEN they are treated the same as all other investors – not before. There is a world of difference in the so-called “fair” and equal treatment under the law Mr. Flaherty – and you know it -- so stop the BS.

Getting back to the astute MOF who failed to see economic disaster looming in the Canadian Corporate Pension laws with the possible bankruptcy of Corporate giants such as Nortel Networks. Apparently there is a myriad of inter-locking laws, rules and policies effecting the priorities of various creditors at the federal, provincial and international levels.

Was our MOF totally ignorant of the risk to Canadian pensioners when corporate giants were allowed to under-fund their employees pensions with the fund administrators? Did he realize the risk but preferred to declare all is well – as with the phantom tax issue – while former employees were being denied pension and separation benefits?

Last but not least – how about the H1N1 performance of our Public Health Agency of Canada? With 30 million, or so, Canadians and nearly a year to prepare what justification is there for the colossal boon-doggle in the supply and delivery of the anti-virus vaccine?

Can there be any justification for depending upon a single source supplier for all of Canada?

Where was our Right Honourable Stephen Harper during this debacle – the PM who said: “we’ll get it resolved”, when questioned about the inequality of the Gary Lunn TRO as compared to all other victims of taxes levied on fictitious income and who then failed to raise a finger to take any further corrective action.

This is exactly the kind of government Canadians deserve, and will get, as long as they do nothing to demand performance from their local candidates seeking election/re-election to Canada’s House of Commons.

My local MP is fully aware he will not have my support in the next federal election unless he commits to supporting the CFET appeals for fair and Equitable Taxation.

If you do not demand performance you will get poor performance – now and for your children as well.

As far as veterans week is concerned – when I see our Right Honourable PM along with our Honourable MOF standing before Canada’s Veterans, with the poppy pinned to their lapel – I feel nothing but disgust and betrayal and I wonder what it will take to get a decent slate of politicians in office to run Canada’s affairs?

See you at the voting polls in Canada’s next federal election – O’Grady.

Victor Drummond ©

IT DEPENDS ON YOUR...

IT DEPENDS ON YOUR PERSPECTIVE
A commentary on the Federal Government’s new
“WHITE COLLAR CRIME BILL”
By Victor Drummond ©
October 2009

The Honourable Ron Nicholson, Minister of Justice, has recently announced, with great fanfare, the introduction of an updated “White Collar Crime Bill” which – according to Minister Nicholson --will protect honest hard-working Canadians from the financial ravages of “White Collar” criminals.

Apparently Minister Nicholson considers the taking of one person’s hard-earned savings, under false pretenses is a criminal act.

What does he consider taking a persons hard-earned savings, up to and including their home and possessions, under the assumption these people have conscientiously and intentionally decided to take their potential – unrealized – profit from shares purchased from their employer – to play the stock markets for even greater gain?

This one-sided, mostly unproven, assumption on the part of the Canada Revenue Agency (CRA) has been used over and over to extort after tax dollars from thousands of victimized Canadians for the past nine years.

It doesn’t seem to phase Minister Nicholson one bit that a document published by the Federal Government – with the title: “Serving Canadians – Canada’s System of Justice” contains statements that assure all Canadians “fair’ treatment and protection of all Canadians from intimidation by “stronger people, or stronger groups of people” and guarantees Canadians, accused of criminal acts, the presumption of “innocence” until proven guilty.

The CRA using the guilty until proven innocent flies in the face of the assurances Canadians receive in the document “Serving Canadians – Canada’s System of Justice” as does the CRA using it’s muscle to intimidate the weaker individual taxpayers into paying taxes that often exceed their gross income for the entire year.

These victimized Canadians are in every bit as much, if not more, financial distress as those who have been bilked out of their life’s savings by some ponzi scheme artist.

Yet our Hon. Minister of Justice won’t even acknowledge there is anything wrong with the Canadian Taxable Benefit Legislation and/or the CRA application policy regarding the taxing of pretend income.

No one has shown me – as yet – that an employee who purchased shares in their employer’s company – using their own after-tax dollars to make the purchase – is guilty of any violation of the laws of Canada, or established tax legislation, if they decide to hold their purchased equities after the time of delivery in hopes of making even greater profit.

Is it not their property to do with whatever they want?
Isn’t the taxman going to get his slice of the pie if the taxpayer actually does make more money on the investment?

So why apply this unfair, punitive, abusive unjust tax policy in the first place? It looks as though the Canadian Government has adopted the attitude: “I’ll do it – because I can and no one can stop me.”

The practice of Corporations offering “Incentive Shares Options” (ISO) plans to valued employees got off to a huge start during the evolution of the Personal Computer (PC’s) and with the proliferation of PC’s the demand for faster communications systems took off like a rocket.

Corporations along with the Canadian and U.S. Government encouraged the introduction of the ISO plans as a means of improving employee loyalty and as a performance incentive.

Both the Canadian and U.S. Governments had income tax legislation in place that allowed the IRS and the CRA to levy a tax on any potential gain the participating employee might receive if they sold their purchased shares at the time they took control over them.

During the Hi-Tech boom years this tax policy did not inflict hardship on the taxpayer as the shares could be sold at any time for more money than the taxes levied.

The hidden tax-trap created by this policy didn’t begin to cause taxpayers any real grief until the Hi-Tech Stock market began a long term downturn in July of the year 2000.

Taxpayers on both sides of the U.S. Canada border were stunned to find they were now being levied horrendous taxes on purely theoretical profit from ISO equities that were now a loss item not a profit item.

Citizens on both sides of the border found they were financially destroyed and their life’s savings were gone and sometimes so were there family homes.

Two U.S. Citizens groups soon appeared and began to lobby the U.S. Government to make changes to their “Alternative Minimum Tax” (AMT) legislation which had now become the basis for the IRS to demand tax payment on phantom income.

The two U.S. Citizens Lobby Groups are:"THE COALITION for FAIR TAXES" (CFT)
www.fair-iso.org and REFORM THE AMT: www.reformamt.org

In October 2008, just as the world economic recession arose, the U.S. President signed the reformed AMT legislation into law -- which put an end to the IRS demanding payment of taxes and related penalties, on phantom income.

Not only has the U.S. Congress recognized the unjust, unfair and abusive nature of taxing honest, hard-working citizens on money that only existed in theory – and put an end to that atrocity but they have done so retroactively in order to be fair to those who have previously paid this penalty.

What is different about taxing phantom income in Canada that makes it “fair” and “justified” but is CONSIDERED BY A LARGE MAJORITY OF THE U.S. CONGRESS to be grossly “unfair”?

Not only did the U.S. Government decide the tax on phantom income was not fair or justified they went the next step and passed legislation to fairly compensate U.S. taxpayers who had already been victimized, by this tax policy, retroactively.

Do the U.S. Congressmen have a better sense of fair play than Canadian MP's?
Is their sense of decency more highly developed?

It certainly looks that way.

Is the U.S. economy in a better state to absorb the loss of accounts receivable that follows the cancellation of hundreds of millions of dollars on the tax receivable records?

Not according to our Prime Minister who keeps assuring Canadians our economy is in much better condition than the U.S. economy.

So it must boil down to a matter of perspective.

In the opinion of our esteemed Prime Minister -- and our elected representatives in the House of Commons -- Canadians do not deserve the same fair treatment our American cousins are receiving from their government.

And as long as we do nothing more than grumble about the neglect and abuse our governmemnt dumps upon us -- we deserve their low opinion of us.

See you at the voting polls for the next federal election O’Grady.

Victor Drummond ©