APPEALS TO REASON ..

APPEALS TO REASON – Part 17
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, to 16 for more background information.
By Victor Drummond ©
May 2009

Synopsis of the events to the present

Part 12 Provides excerpts from the Hon. Mr. Flaherty’s speech to the House of Commons Standing Committee on Finance, where he preaches “Tax Fairness” for all Canadians but ignores all appeals from victims of Canada’s unfair policy of taxing phantom income. Thereby earning himself the title my maternal Mennonite grandmother applied to straight face prevaricators e.g. Flannel Mouth.

Part 12 Also reports on the creation and evolution of the group of grass-roots Canadians named: “Canadians for Fair and Equitable Taxation” (CFET).

Part 15 Now discover more about the things members of CFET have done, and are doing, to inspire the Canadian government to live up to it’s promise(s) of fair taxation and equal treatment under the law.

A letter from the Honourable Gordon O’Connor to his colleague the Honourable John Baird reveals which victims of taxes levied on phantom income are eligible to apply for tax remission and which victims are not.

Part 16 See how “Canada’s Fair Taxation Plan” falls far short of actually being even close to “Fair”.
What was the government strategy when they introduced the T1212 tax deferment option – See below

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In the year 2000 Canada’s Liberal Government was up to its ears in scandal and needed a lot of taxpayer’s money to finance a number of under the table operations.

The recently exposed flaw in the taxable benefits legislation brought to the surface by the High-Tech stock market crash, involved hundreds of millions of taxpayers dollars.

If the draft budget prepared by the Honourable Paul Martin, Minister of Finance, were to actually cancel the imposition of taxes on phantom income then the tax income to the Federal Government (Accts Receivable) would decline by hundreds of millions of dollars.

But if these unfair tax levies were to be merely deferred and the victimized taxpayer forced to hold on to the related equities then all would be well so far as the CRA was concerned. These deferred taxes would then remain on the CRA accounts receivable.

Then all that was needed to make the whole scam acceptable would be for the stock market to do what it usually does, after a short term crash, e.g. make a full recovery and resume the boom mode of operation.

Had the stock market resumed boom mode operation then:

(1) The victimized taxpayer would be able to sell their prematurely taxed equities for enough money to pay the tax

and

(2) The government could leave the defective taxable benefit legislation intact to continue to scoop premature taxes based upon the phantom income of unwitting participants in their employer’s ESPP/ESO incentive reward programs.

This tactic may have worked, as intended; except for the fact the High-Tech stock market crash of the year 2000 wasn’t just a blip on the world financial radar screen. It was actually the opening salvo of a whole series of market declines and world-wide economic disasters.

By the time the 2006 Federal Election arrived the Liberal government, financial authorities, realized the world economic problems were not short term and their failure to properly correct the phantom tax problem had now painted them into a bit of a corner.

Many victimized Canadian taxpayers who were barely existing under financial duress, with horrendous deferred tax debts, soon had even greater problems due to becoming unemployed when their employer was required to downsize or even go right out of business.

To add insult to injury some victims were also facing cancellation of their tax deferment due to their former employer corporation being bought out or just plain closing their doors.

Although time would reveal the Federal Conservative Party was not really up to the job of keeping their pre-election promises of “fair taxation” the at the time of the 2006 federal election the Canadian voting public were becoming disillusioned with the Federal Liberal Party performance.

So when it came time for a Federal Election most Canadians were ready for a change of government.

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The foregoing explanation is the one that makes the most sense to me as to why the Liberal Government, under Prime Minister Paul Martin fumbled around pretending to apply corrective action to provide “fair taxation” for Canadians victimized by the defective taxable legislation and the CRA policy of applying that legislation. If there is a better explanation I would love to hear it.

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The Conservative 2006 pre-election campaign included such lofty slogans as: “STAND UP FOR CANADA” and election platform promises such as: “reduced taxation”, “fair taxation” etc.

The Canadian voting public “STOOD UP FOR CANADA” in that election and the Federal Conservative Party formed the next government.

And true to part of their pre-election promise the Conservative government provided “reduced taxes” for most Canadians and “fair taxation” for 37 former employees of the defunct SDL Optics Inc. Corporation in the riding of the Hon. Gary Lunn, Saanich Gulf Islands British Columbia via an exclusive Tax Remission Order (TRO).

Although the issued TRO to provided “fair taxation” for the 37 people named in the order it did just the opposite for the thousands of Canadian taxpayers who were also taxed on money they never saw but were excluded from the benefits provided by the Gary Lunn TRO.

That small oversight meant the pre-election promise of “fair taxation" was still a pipe dream for the vast majority of Canadians victimized with taxes still standing and levied on money they never saw.

The party that was elected on the slogan: “STAND UP FOR CANADA” sat down when it came time to “STAND UP FOR TAX ABUSED CANADIANS”.

Although the United States government has amended their comparable defective tax legislation, e.g. the “Alternative Minimum Tax” (AMT) laws, thereby putting an end to taxing phantom income in the U.S.A.

(Ref: www.fair-iso.org and www.reformAMT.org ), this atrocious practice is still on-going in Canada.

The U.S. government took this proper and decent action in October 2008 at a time when the U.S. economy was, and still is, in much worse condition than Canada’s.

The world economic downturn is still on-going, with no end in sight, and the longer the Canadian Government delays properly correcting this outrageous tax policy the greater the cost will be to compensate those who have been, and are still are, being victimized and the longer Canadian victims will be obliged to endure this abuse.

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A visit to the Canadian Government web page: http://www.cra-arc.gc.ca/fairness/
would have you believe perfidious claims such as: “Revenue Agency (CRA), fairness and the promotion of taxpayers' rights have long been key goals. "We are committed to treating taxpayers fairly and to ensuring their rights are upheld through the CRA redress mechanisms.”

The “fairness” of taxing phantom income has been challenged hundreds of times, in the past year alone, and not one member of the Canadian government, CRA members included, have replied to the appellants that the challenged tax policy is “fair” and/or what basis of logic it can be“justified”.

Why not?

Because there is no possible logical rationale to support taxing honest, hard-working Canadians on money they did not actually receive. That is why.

Apart from the personal tragedy imposed upon thousands of honest, hard-working Canadians financially ruined by a greedy, callous and uncaring gang of “senior government bureaucrats” the real and greater tragedy is that an entire democratically elected parliament including the leaders of every federal political party: who are supposed to be representatives of the Canadian people, have (so far) failed to act on behalf of the people who elected them. They have totally ignored all manner of appeals for justice and fair treatment under the law.

Every member of Canada’s 39th and 40th parliament have been sent letters and/or e-mails informing them of the massive violation of government declared “right” to “fair” and “equal treatment under the law” so loudly proclaimed in the updated “Taxpayers Bill of Rights” BUT only one sitting member of Canada’s 40th parliament has put pen to paper to declare this is an atrocity that should be corrected.

Tell me! What good is a “Charter of Rights and Freedoms” and/or a: “Bill of Taxpayers Rights” when there is no provision to enforce these rights when they are violated, (by the very government that created them)?

AND FURTHERMORE

Tell me! What good is a democratically elected body of Cabinet and Parliamentary members that not only do not act upon reported violations of those “guaranteed rights” but by their failure to act to correct the problem, when so notified, become accessories to the injustice before, during and after the fact.

As said before: Any system of “fair taxation” that produces victims in mass numbers but requires victims to appeal their injustice individually is in itself inherently unfair.

In such a system some victims will receive favourable decisions and others will not: depending more on the whim of the person judging the appeal than on the merits of the victim’s case. (Auditor Generals report)

Also other victims that do not have the required documentation to launch an appeal are left out of the appeal process altogether.

Think about it. There is only one way for the Canadian Government to really fulfill the taxation rights to which they say all Canadians are entitled and that is to do what the United States Government has done to correct their phantom tax problem, e.g. correct the defective legislation that provides a basis for such an atrociously and unfair tax policy.

Ref: www.fair-iso.org and www.reformAMT.org and fairly compensate those who have been victimized by it.

Until Canada’s defective “taxable benefit legislation” has been amended to remove equities such as corporate shares and share purchase options, (no matter how they were acquired), from the “taxable benefit” classification and reclassify them to be what they actually are: “Capital Investments” there is no possible way the government can come even close to providing what they promised: “Fair and Equitable Taxation”.

Then do not tell me I have “rights” that my government, or anyone else, can violate with impunity, or that I have “rights” that I can only realize by hiring a lawyer and fighting the system to have those “rights” honoured. Those are “rights” that are only applicable to the wealthy and well connected.

I can not imagine anything more useless than “rights” that no one will enforce when they have been proven to have been violated. Can you?

Victor Drummond ©