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 ©