APPEALS TO REASON ..

APPEALS TO REASON – Part 8
A series of letters and E-mail messages from Canadian victims
of taxes on phantom income to Canadian Government Authorities, at all levels,
appealing for fair treatment and the, often idiotic, replies they received.

Read: Appeals To Reason Part – 1 (preamble) & Parts – 2, 3,4,5,6,7 for more background information.
By Victor Drummond ©
April 2009

Synopsis of the events to the present

Part 6: In the federal election of 2006 the Conservative Party was elected on the promise of fair and reduced taxation and their slogan “STAND UP FOR CANADA”
Read APPEALS TO REASON Part 8 to see how the “Fair Tax” promise was perverted and the government the challenged voters to "STAND UP FOR CANADA" then failed to "STAND UP FOR ABUSED CANADIANS".

Part 7: Reprints of two articles that appeared in Canadian Newspapers following the announcement of the SDL Optics/JDSL Tax Remission Order (TRO). Now read the way the outrageous tax on phantom income issue was bungled by both Prime Minister Paul Martin and Prime Minister Stephen Harper.

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The following is a quote from the January 13, 2007 article:- “What about the rest of us?” (See APPEALS TO REASON – Part 7)

"It took a change in government to get someone to listen, but the Prime Minister has come through and delivered tax relief on this issue," says Mr. Lunn, who is the MP for Saanich-Gulf Islands in B.C., where the now defunct JDS plant was located.

The following are similar quotes from the APPEALS TO REASON – Part 7 article:-
Stock fiasco victims to get tax refunds: written by a different journalist.

"It took a change in government to get someone to listen, but the prime minister has come through and delivered tax relief," said Lunn. "It's not in the interest of government to tax people on money they never saw."

Prime Minister Stephen Harper, during an election stop in Victoria in December 2005, told the Times Colonist: "we'll get it resolved" and that changes to the federal tax code were necessary.

Former Liberal Prime Minister Paul Martin, in an election stop at Victoria's airport in June 2004, made a similar promise to "fix that" -- but it never happened.

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We all know the old joke: “How do you know when politicians are lying?”
Answer: “Their lips are moving.”

What things do Canadians have a right to demand of their Prime Ministers? Here is a short list:

(1) Be well informed on things they can accomplish before they make any commitment to the Canadian people. Any promise made is expected to be kept unless changing circumstances render the promise unnecessary or impossible to fulfill.

(2) If a promise as important as protecting innocent, hard-working, Canadians from being taxed into financial oblivion on money they never received, is not kept, then Canadians are entitled to an explanation.

Especially after the Prime Minister has signed a Tax Remission Order (TRO) revoking these phantom income taxes and penalties: “for a favoured few.”

If no explanation is provided, for any unfulfilled promise this important to all Canadians then the unreliable, ineffective, incompetent, Prime Minister should no longer receive voter support.

The more defects ‘in your elected government representatives’ voters tolerate the more deficient your government is going to become. .

Both Prime Minister Paul Martin and Prime Minister Stephen Harper acknowledged awareness of the insidious, unfair and punitive aspects of Canada’s taxable benefit legislation as applied to ESPP and ESO plans, when they each made statements such as: “I will fix that.” and “We’ll get it resolved.”

Prime Minister Stephen Harper even acknowledged he was well aware the problem required: “changes of the federal tax code were necessary” if it were going be “resolved” as he put it.

Neither Prime Minister Paul Martin nor Prime Minister Stephen Harper has delivered on these commitments and neither of them has offered any explanation for their failure to do so.

Why not?

My money bets the reason is because a true explanation would be more damming upon them, personally, than would failure to deliver on their promise: without any explanation.

Likewise the callous indifference of cabinet members, regarding the distress and suffering imposed on their constituents, would become painfully obvious if details, of their lack of concern shown constituent-victims appeals, became public.

This information could adversely affect their personal, and their party’s, chances for re-election if the true facts became public knowledge.

Admittedly Paul Martin inherited a can of worms government when he succeeded the Right Honourable Jean Chretien as leader of the federal Liberal Party and became Prime Minister of Canada on December 12 2003.

By the end of year 2004, however, Martin should have been well enough aware regarding the limits of his power to make good on any promise to amend Canada’s defective taxable benefits legislation and to fairly compensate everyone already victimized by it.

If he did not, he was incompetent and if he did then he acted in bad faith. His lips were moving when said: “I will fix that.” referring to him taking corrective action respecting Canada’s defective taxable benefit legislation and putting an end to taxing honest, hard-working Canadians on money that never actually existed, e.g. phantom income.

As Canada’s Minister of Finance Paul had considerable prior experience in this area. He was well aware of the unfair aspects of taxing phantom income. So for him to say: “I will fix that.” and then fail to take any effective follow-up action is inexcusable.

Possibly his failure, to deliver on that commitment, was a factor in his government losing their majority position and then losing the federal election in 2006.

Stephen Harper, on the other hand, was a novice when he became Prime Minister in the year 2006 and he may have really believed he could actually make good on a promise to provide Canadian taxpayers a level field of income tax policy and operation.

Stretching credibility to the limit I am prepared to accept that Harper regarded his approval of the Gary Lunn TRO as an initial step toward having the defective taxable benefit legislation corrected and all victimized Canadian taxpayers treated fairly. Statements made by both MP Gary Lunn and Prime Minister Stephen Harper, at that time, suggest that was the plan.

If it was truly his intention to have the defective legislation corrected and the problem “resolved” as he put it, then something must have happened to cause him to change his mind.

Prime Minister Harper has not “resolved” the problem and has not offered an apology, or an explanation, for his failure to deliver on his: “we’ll get it resolved.” commitment.

Since the TRO fiasco he has kept totally silent on the phantom tax issue and his cabinet has also maintained silence on this atrocity as well.

Why ?

Perhaps the following excerpts from an article published in the December 7th, 2007 issue of the Victoria Times Colonist newspaper can shed some light on this mystery.

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Article Title:- “JDS deal dangerous precedent Ottawa told.”

The federal government has offered tax relief to several dozen former employees of high-tech company JDS Uniphase who made and lost millions on paper, in a special deal that could open the door for other taxpayers to demand the same treatment.

The decision, recently published as a “remission order” in the Canada Gazette, was approved by cabinet despite objections from officials at Finance and Canada Revenue Agency.

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

(skipping several paragraphs each condemning the unfair manner in which this whole tax remission issue had been mismanaged.)

The Tax agency was instructed last December by then National Revenue minister Carol Skelton to prepare the order. That’s also when the employees’ long term champion, Natural Resources Minister Gary Lunn, announced the government would forgive all taxes on the (potential) windfall gains employees (might have) made on their employee stock-purchase plan but never cashed before it plummeted in the high-tech meltdown.

(Note:- the underlined words (potential) and (might have) were inserted by me to clarify there was no real gain to the employee because the shares held were not cashed in while they had the potential to produced a profit for the employees. The “gains” taxed were never actually realized in any tangible form. Now: skipping a few more descriptive paragraphs)

About 245 of the more than 500 SDL employees bought stock in the purchase plan.

Some sold the shares as soon as they received them. They faced big tax bills they paid out of their windfall profits. Others didn’t sell and faced the same huge tax bills.

(Note: “huge tax bills” that were levied on zero to negative income.)

By this time, the stock-market crash in 2000-2001 drove down shares and employees faced huge losses and tax obligations they couldn’t afford.
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From the foregoing article it appears the Prime Minister(s) of Canada may only govern Canada with the approval of “senior bureaucrats” in Finance and the CRA.

That raises the question: Who actually governs Canada?

Is it our democratically elected Members of the House of Commons (HOC). Or is it the mandarins, in cozy well paying government jobs, who dictate to our elected law makers how the laws must be applied? Events following the TRO announcement suggest the latter.

Although James Flaherty was not actually named, as one of the Senior bureaucrats warning Harper against “setting a dangerous precedent”, who in the Ministry of Finance could make such a statement to the Prime Minister without the Minister of Finance’s knowledge and approval?

Answer: No one. Therefore the Hon Jim Flaherty is at least a willing accomplice to those: “senior bureaucrats” who knowingly deny all Canadians a fair tax system and are willing to abuse honest, hard-working Canadians by forcing them to pay unwarranted tax on money they might have received, but did not receive. And at worst he is the ring leader of those callous, uncaring gang of: “senior bureaucrats”.

To follow up on this “we’ll get it resolved” action read APPEALS TO REASON – Part 9 when it is posted.

Victor Drummond ©