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Jack M. Mintz: How small businesses get taxed more under Trudeau II

The Trudeaus: Pierre and Justin

When I had been an undergraduate studying tax policy, I remember John Bulloch’s vicious attack on Pierre Elliott Trudeau’s tax reform package, that was particularly threatening to small businesses and investors. Bulloch, head from the Canadian Federation of Independent Business, was successful in paring back proposals that will have squeezed many Canadian entrepreneurs hard. As a result, the CFIB developed a very large membership and became one of the most powerful advocacy groups in Ottawa. 

Dan Kelly, the current head of the CFIB, has a difficult challenge on his hand with Trudeau II, whose upcoming budget offers to curtail tax “loopholes” that encourage professionals and businesspeople to avoid personal income taxes by creating small corporations. With proposed CPP expansion, the development of Ontario’s pension plan and municipal business-property-tax increases, Kelly and his membership face a storm of cost increases brought on by tax-happy governments.

Actually, there is another whammy which has already hit small-business owners without sufficient comment: the Trudeau four-point hike in the top personal income tax rates. While Trudeau promises to deliver Harper’s proposed small-business corporate rate cut from 11 to nine percent on as much as $500,000 in profits, he has already raised 2016 personal taxes on profits more than $200,000 derived by owners using their corporations.

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