A TAXPAYERS BILL OF RIGHTS
By Victor Drummond ©
It will no doubt come as a welcome bit of news that the current Government has announced the creation of a Canadian Taxpayers “Bill of Rights” and the creation of a Federal Ombudsman to keep the Canadian Revenue Agency Polite and civil in it’s dealings with the Canadian Taxpayer.
Time will tell just how much of a benefit these two events will be to the victims of the legalized robbery tolerated for so many years under the former government in power.
The treatment of all those who were taxed on “Benefits” they never saw and denied the same tax relief given the JDS employee’s in British Columbia, in 2006, are a clear violation of the “Equality” rights already provided in article 15(1) of the “Canadian Charter of Rights and Freedoms.”
If no authority in the current government is prepared to act spontaneously to rectify this violation what good is another “Bill of Rights” going to do? And what good is a Federal Ombudsman who has no authority to amend articles in the Canadian Income Tax Act, that allows taxpayers to be taxed on potential gains, going to do?
If you are as outraged as I am about this fiasco you can contact your Member of Parliament via the following URL and/or write to your member of Parliament postage free at the address accessible from this same URL :-
http://webinfo.parl.gc.ca/MembersOfParliament/MainMPsAddressList.aspx?TimePeriod=Current&Language=E
To obtain your MP’s E-mail address click on his or her Name Link on the foregoing URL and let them know how you feel about this poor excuse of a fix of the “Taxable Benefits” problem.
Adding more ineffective players to the team is not the solution. Changing the Tax Laws to exclude articles of intangible value, (such as corporation shares), from the “Taxable Benefits” classification doesn’t require more team players – or anyone with more than a minimum sense of “Fair Taxation”.
Victims of the Taxable Benefits robbery have always had the option of taking their case
to the “Tax Court of Canada”.
This organization will allow individuals to present their arguments, with, or without, legal representation.
In both cases the person taking their case to this court is likely throwing good money after bad.
This is the same option provided by the new Taxpayers Bill of Rights and/or the New Ombudsman. Great News?
Victor
Showing posts with label I'm mad as hell and I'm not going to take it anymore.. Show all posts
Showing posts with label I'm mad as hell and I'm not going to take it anymore.. Show all posts
Thursday, May 31, 2007
The Education of Jennifer Jones
The Education of Jennifer Jones
A Fable to Illustrate Very Real Unfair Taxation
In Canada
©
Written by Victor Drummond
March 28 2007
Although Walter had been born and raised on a farm he found his interests and aptitudes more suited to science and technology. So when his father passed away he declined to take over the farm and gave title to the property to his younger brother William.
Walter met the love of his life, Janet MacIntosh, at a church picnic in the fall of 1983 and they married in June of 1984. Their first, and only child, Jennifer, was born in November 1985, and was instantly their pride and joy. Not only did Jennifer grow to be the antithesis, of the dumb blond syndrome, she was both beautiful and highly intelligent.
Jennifer was at the head of her class, all through public and high school, and was nominated valedictorian in her final year at high school. Her uncle, William Jones, was so proud of Jennifer that he opened a trust account of $20,000 to finance her University education and he named Jennifer’s father, Walter, as Trustee.
After leaving the farm Walter took courses at the University of Waterloo. Upon graduation, with a Master’s degree, he went to work for Bell Northern Research Laboratories (BNR), in Ottawa and was assigned to a Fibre-optic research project.
Walter’s expertise in the field of fibre-optics soon came to the attention of other researchers, formerly with the BNR Labs, and he was offered a position with a company they had formed: i.e. – JDS Optics Incorporated. The deal offered Walter the same take-home pay and an opportunity to grow with a young company that had demonstrated remarkable growth from the day it was formed.
Among other employees Walter was encouraged to buy shares in the company. The shares were not trading, on any established stock exchange. Consequently the price per share was volatile and subject to unpredictable changes in value. Because the JDS Optics Inc. was a Canadian Controlled Private Corporation, (CCPC), any shares given, or sold to company employees were classed as a Capital Investment by Revenue Canada. Therefore Walter’s Income tax would not be affected by the gift, or discount purchase, of shares in his employer’s company -- unless he later sold them and realized a profit.
Being a total novice in the area of trading shares Walter declined, at first, to purchase any shares -- of any kind.
After seeing fellow employees make handsome profits, through participation in company shares Option Plans, Walter
eventually changed his mind and decided to participate in the next offering(s) of company stock.
About that time JDS Optics Inc. found it expedient to merge with a subsidiary of the Furukawa Corporation of Tokyo Japan. The subsidiary company was the Fitel Optics Corporation and the merged company then became incorporated as JDS Fitel Inc.
Furukawa Incorporated also acquired a 51% interest in JDS Fitel causing the latter to lose its CCPC status. Now if the company gave, or sold, its shares to its employees the shares would be classed as a “Taxable Benefit” by Revenue Canada. From then on any price advantage the employees might be given, at the time of purchase, and/or at the time of receipt of the shares, is added to their “Employment Income” at the current “Inclusion Rate”. This action produced a higher tax rate on their real income plus the potential income, (seldom actually realized), for each share they purchased.
Walter signed all succeeding Option Plan agreements and began to buy as many shares as his contracts allowed. To pay for these shares he took out a second mortgage, on his home, and withdrew the $20,000 from Jennifer’s Education trust.
He was thrilled when his holdings more than doubled in the first year. He signed the next option plan and watched with great anticipation as the company shares split 2 for 1 several times and continued to climb in value per share year after year. In July 2000 Walter owned 2,600 shares of JDSU stock which was then trading at: $1,350 per share. He had another 400 shares on purchase that would be delivered in March 2001-- at which time Walter planned to sell out the total 3000 shares, pay off his loans and take a vacation with his family.
Unfortunately by January 2001 JDSU shares had fallen in value to less than half the value they had the previous July. Walter then decided to wait for the next upturn in JDSU share value before selling his shares. By March 2001 the value of JDSU shares had fallen by another 50% and were then trading in the $250.00 per share range. Walter’s 3000 shares were now only worth : 3000 x 250 = $750,000. This amount would not cover the total debt he owed on:- his mortgages, deferred Taxes and Jennifer’s Education Trust Fund. If he sold the shares now it would trigger the deferred tax debt so Walter decided to wait out the market decline and sell out as soon as he could break even -- or close to break even.
The awaited market recovery never materialized and by the end of 2002 JDSU shares were trading around $20.00
each making Walters holdings worth a total of: 3000 x 20 - $60,000. He could not actually realize even this amount of money because if he sold his shares the proceeds would not cover half the outstanding deferred tax that the sale would trigger.
To add insult to injury Walter was released from the employment of JDS Uniphase during the downsizing of the company in 2003. His termination bonus barely covered the overdue mortgage payments and Walter was left financially decimated.
Walter’s brother, William, was so angry with Walter, over the loss of Jennifer’s education fund that he would no longer speak to him. Walter’s wife, Janet, was also very upset with him but went out to find a job to help keep the family with a roof over their head, and clothed and fed. Jennifer, however, moved away from home to a place of her own and went out to work. She then applied for a co-operative course at Waterloo University. Jennifer can achieve her University education by taking work assignments between semesters. It will take her a couple of years longer – but she will eventually get the education she so richly deserves. No Thanks to Revenue Canada.
====================================================================
Authors Comment:-
Although this story is partly fiction it is typical of events that actually happened to thousands of honest, hard working, Canadians. How would you feel if your employer rewarded you with company shares, for outstanding performance, only to end up owing Revenue Canada considerably more money than the shares were actually totally worth when you sold them?
If you want to see the Canadian Government level the playing field and provide the same rules to every Canadian Taxpayer post a comment and/or send a copy of this article to anyone you know that may have been a victim of unfair taxation and/or send me an E-mail:- vic.drummond@sympatico.ca
Victor Drummond ©
A Fable to Illustrate Very Real Unfair Taxation
In Canada
©
Written by Victor Drummond
March 28 2007
Although Walter had been born and raised on a farm he found his interests and aptitudes more suited to science and technology. So when his father passed away he declined to take over the farm and gave title to the property to his younger brother William.
Walter met the love of his life, Janet MacIntosh, at a church picnic in the fall of 1983 and they married in June of 1984. Their first, and only child, Jennifer, was born in November 1985, and was instantly their pride and joy. Not only did Jennifer grow to be the antithesis, of the dumb blond syndrome, she was both beautiful and highly intelligent.
Jennifer was at the head of her class, all through public and high school, and was nominated valedictorian in her final year at high school. Her uncle, William Jones, was so proud of Jennifer that he opened a trust account of $20,000 to finance her University education and he named Jennifer’s father, Walter, as Trustee.
After leaving the farm Walter took courses at the University of Waterloo. Upon graduation, with a Master’s degree, he went to work for Bell Northern Research Laboratories (BNR), in Ottawa and was assigned to a Fibre-optic research project.
Walter’s expertise in the field of fibre-optics soon came to the attention of other researchers, formerly with the BNR Labs, and he was offered a position with a company they had formed: i.e. – JDS Optics Incorporated. The deal offered Walter the same take-home pay and an opportunity to grow with a young company that had demonstrated remarkable growth from the day it was formed.
Among other employees Walter was encouraged to buy shares in the company. The shares were not trading, on any established stock exchange. Consequently the price per share was volatile and subject to unpredictable changes in value. Because the JDS Optics Inc. was a Canadian Controlled Private Corporation, (CCPC), any shares given, or sold to company employees were classed as a Capital Investment by Revenue Canada. Therefore Walter’s Income tax would not be affected by the gift, or discount purchase, of shares in his employer’s company -- unless he later sold them and realized a profit.
Being a total novice in the area of trading shares Walter declined, at first, to purchase any shares -- of any kind.
After seeing fellow employees make handsome profits, through participation in company shares Option Plans, Walter
eventually changed his mind and decided to participate in the next offering(s) of company stock.
About that time JDS Optics Inc. found it expedient to merge with a subsidiary of the Furukawa Corporation of Tokyo Japan. The subsidiary company was the Fitel Optics Corporation and the merged company then became incorporated as JDS Fitel Inc.
Furukawa Incorporated also acquired a 51% interest in JDS Fitel causing the latter to lose its CCPC status. Now if the company gave, or sold, its shares to its employees the shares would be classed as a “Taxable Benefit” by Revenue Canada. From then on any price advantage the employees might be given, at the time of purchase, and/or at the time of receipt of the shares, is added to their “Employment Income” at the current “Inclusion Rate”. This action produced a higher tax rate on their real income plus the potential income, (seldom actually realized), for each share they purchased.
Walter signed all succeeding Option Plan agreements and began to buy as many shares as his contracts allowed. To pay for these shares he took out a second mortgage, on his home, and withdrew the $20,000 from Jennifer’s Education trust.
He was thrilled when his holdings more than doubled in the first year. He signed the next option plan and watched with great anticipation as the company shares split 2 for 1 several times and continued to climb in value per share year after year. In July 2000 Walter owned 2,600 shares of JDSU stock which was then trading at: $1,350 per share. He had another 400 shares on purchase that would be delivered in March 2001-- at which time Walter planned to sell out the total 3000 shares, pay off his loans and take a vacation with his family.
Unfortunately by January 2001 JDSU shares had fallen in value to less than half the value they had the previous July. Walter then decided to wait for the next upturn in JDSU share value before selling his shares. By March 2001 the value of JDSU shares had fallen by another 50% and were then trading in the $250.00 per share range. Walter’s 3000 shares were now only worth : 3000 x 250 = $750,000. This amount would not cover the total debt he owed on:- his mortgages, deferred Taxes and Jennifer’s Education Trust Fund. If he sold the shares now it would trigger the deferred tax debt so Walter decided to wait out the market decline and sell out as soon as he could break even -- or close to break even.
The awaited market recovery never materialized and by the end of 2002 JDSU shares were trading around $20.00
each making Walters holdings worth a total of: 3000 x 20 - $60,000. He could not actually realize even this amount of money because if he sold his shares the proceeds would not cover half the outstanding deferred tax that the sale would trigger.
To add insult to injury Walter was released from the employment of JDS Uniphase during the downsizing of the company in 2003. His termination bonus barely covered the overdue mortgage payments and Walter was left financially decimated.
Walter’s brother, William, was so angry with Walter, over the loss of Jennifer’s education fund that he would no longer speak to him. Walter’s wife, Janet, was also very upset with him but went out to find a job to help keep the family with a roof over their head, and clothed and fed. Jennifer, however, moved away from home to a place of her own and went out to work. She then applied for a co-operative course at Waterloo University. Jennifer can achieve her University education by taking work assignments between semesters. It will take her a couple of years longer – but she will eventually get the education she so richly deserves. No Thanks to Revenue Canada.
====================================================================
Authors Comment:-
Although this story is partly fiction it is typical of events that actually happened to thousands of honest, hard working, Canadians. How would you feel if your employer rewarded you with company shares, for outstanding performance, only to end up owing Revenue Canada considerably more money than the shares were actually totally worth when you sold them?
If you want to see the Canadian Government level the playing field and provide the same rules to every Canadian Taxpayer post a comment and/or send a copy of this article to anyone you know that may have been a victim of unfair taxation and/or send me an E-mail:- vic.drummond@sympatico.ca
Victor Drummond ©
Thursday, May 17, 2007
WHAT IS YOUR VOTE WORTH?
Barring any unforseen difficulties there will be a Federal election in the near future.
There are all kinds of would-be Members of Political Parties campaigning for your vote.
This money will be used to inform you of the wonderful things their party and they personally will do to make your world a better place.
Each one of them will be putting up all the money they can afford, and/or all the money the election rules will allow, in order to win over your vote. Therefore your vote is valuable -- in terms of money alone.
Your vote is worth much more, however, in terms of the power it gives you the voter to demand honest government.
Heaven forbid that any politician would make a false promise, or tell deliberate lies in order to, rob you of your vote and, try to gain power under false pretences.
If such a thing happened, however, would you vote for the same person, or party again?
What if a political party campaigned on the promise to give the Canadian Public Fair Taxes?
Does it concern you that some Canadians are given tax relief that the others in identical conditions are denied?
Do not throw away your opportunity to make the elected party live up to their promises.
Get out and vote -- and make your vote count -- only vote for the person and/or party that keeps their promises -- or that recognizes unfair policies or practices and corrects them without coercion.
If you do not use your vote, or use it indiscriminently, then you have no one to blame but yourself for encouraging any party, in power, to fleece you like the political sheep that you are.
Victor Drummond
E-mail:- vic.drummond@sympatico.ca
There are all kinds of would-be Members of Political Parties campaigning for your vote.
This money will be used to inform you of the wonderful things their party and they personally will do to make your world a better place.
Each one of them will be putting up all the money they can afford, and/or all the money the election rules will allow, in order to win over your vote. Therefore your vote is valuable -- in terms of money alone.
Your vote is worth much more, however, in terms of the power it gives you the voter to demand honest government.
Heaven forbid that any politician would make a false promise, or tell deliberate lies in order to, rob you of your vote and, try to gain power under false pretences.
If such a thing happened, however, would you vote for the same person, or party again?
What if a political party campaigned on the promise to give the Canadian Public Fair Taxes?
Does it concern you that some Canadians are given tax relief that the others in identical conditions are denied?
Do not throw away your opportunity to make the elected party live up to their promises.
Get out and vote -- and make your vote count -- only vote for the person and/or party that keeps their promises -- or that recognizes unfair policies or practices and corrects them without coercion.
If you do not use your vote, or use it indiscriminently, then you have no one to blame but yourself for encouraging any party, in power, to fleece you like the political sheep that you are.
Victor Drummond
E-mail:- vic.drummond@sympatico.ca
Friday, May 11, 2007
Rob Me Once
Rob Me Once -- Shame on You. Rob Me twice Shame on Me.
In the time period from 1996 to 2003 -- I have been told by a significant number of people that they have been heavily taxed on "Employment Income" that never happened -- and that thousands of other Canadians suffered the same fate.
These tax victims were people who participated in shares options plans promoted by their employers. The same shares, obtained in any other way, are only taxable on GAINS actually realized by the holder and then only if there is a real, tangible, spendable, profit realized.
Furthermore if a conventional share holder has some good years -- and pays "Capital Gains Taxes" -- followed by a year or so of real Losses -- then the shareholder can either apply the losses against previous years gains, (up to three years prior), and/or carry the losses forward indefinitely to be applied against future gains. When such Capital Losses are applied to past or future gains the shareholder realizes a reduction in the taxes paid, or payable, and that system works rather well.
No one asks the conventional shareholder how they came into possession of the shares they have or sell.
If, however, an employee participates in an employers shares reward, incentive plan the Canadian tax system becomes a booby trap. The shares obtained in this manner are now classed as a "Taxable Benefit" and the Canadian Department of Revenue obliges the employer to calculate any potential gain the employee might realize, at the time of purchase, and again at the time of delivery, and add this calculated -- as yet unrealized gain -- onto the employees actual "Employment Income" and taxes are then calculated on that phantom income total.
While some employees may have come away with real gains, many were taxed on gains that never materialized. Even those who made real profits were robbed because they are denied the priviledge of applying past, or future, shares losses to recover taxes paid on their temporary gain.
Those that never realized a gain of any kind were taxed on those imaginary gains for several years in the time period mentioned above. In many cases the tax alone was greater than the persons total real Employment Income and several victims, I know personally, had to borrow money, or mortgage their homes to pay those unfair taxes.
To compound the felony the current government recently made a deal with the employee's of the JDS Uniphase Corportion, in British Columbia to alleviate their deferred taxes on these so-called "Taxable Benefits".
To the present this tax relief is only for the JDS victims in BC and others in a similar situation are not included. Not even other victims in BC.
This article is an invitation to all other such victims to speak up and let the goverment know they will not support such discrimination in either the tax system and/or the preferential treatment of victimized Canadians.
Rob Me Twice -- Shame on Me.
Victor Drummond
vic.drummond@sympatico.ca
In the time period from 1996 to 2003 -- I have been told by a significant number of people that they have been heavily taxed on "Employment Income" that never happened -- and that thousands of other Canadians suffered the same fate.
These tax victims were people who participated in shares options plans promoted by their employers. The same shares, obtained in any other way, are only taxable on GAINS actually realized by the holder and then only if there is a real, tangible, spendable, profit realized.
Furthermore if a conventional share holder has some good years -- and pays "Capital Gains Taxes" -- followed by a year or so of real Losses -- then the shareholder can either apply the losses against previous years gains, (up to three years prior), and/or carry the losses forward indefinitely to be applied against future gains. When such Capital Losses are applied to past or future gains the shareholder realizes a reduction in the taxes paid, or payable, and that system works rather well.
No one asks the conventional shareholder how they came into possession of the shares they have or sell.
If, however, an employee participates in an employers shares reward, incentive plan the Canadian tax system becomes a booby trap. The shares obtained in this manner are now classed as a "Taxable Benefit" and the Canadian Department of Revenue obliges the employer to calculate any potential gain the employee might realize, at the time of purchase, and again at the time of delivery, and add this calculated -- as yet unrealized gain -- onto the employees actual "Employment Income" and taxes are then calculated on that phantom income total.
While some employees may have come away with real gains, many were taxed on gains that never materialized. Even those who made real profits were robbed because they are denied the priviledge of applying past, or future, shares losses to recover taxes paid on their temporary gain.
Those that never realized a gain of any kind were taxed on those imaginary gains for several years in the time period mentioned above. In many cases the tax alone was greater than the persons total real Employment Income and several victims, I know personally, had to borrow money, or mortgage their homes to pay those unfair taxes.
To compound the felony the current government recently made a deal with the employee's of the JDS Uniphase Corportion, in British Columbia to alleviate their deferred taxes on these so-called "Taxable Benefits".
To the present this tax relief is only for the JDS victims in BC and others in a similar situation are not included. Not even other victims in BC.
This article is an invitation to all other such victims to speak up and let the goverment know they will not support such discrimination in either the tax system and/or the preferential treatment of victimized Canadians.
Rob Me Twice -- Shame on Me.
Victor Drummond
vic.drummond@sympatico.ca
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