CMB MAGAZINE cmba-achc.ca fall 2017 | 9
retrenched by awkwardly rolling back some
of the measures contained in the tax proposal.
Professor Jack Mintz refers to this as the "Great
Leap Backwards," and believes that: "For now,
the Liberal government's gambit has worked,
at least in the sense that it has shied focus
away from the original, flawed tax reform
proposals and onto a misguided reduction
in the small business rate." Even though the
Liberals are concerned about the gap between
personal and corporate tax rates, they have
chosen to further widen it by reducing the
small business tax rate to nine per cent and
they will need to make up for lost revenue
by increasing taxes elsewhere. While the tax
rollback reverses some of the worst features of
the tax proposal, Professor Mintz argues that
"the paltry gains from this latest reduction
in the small business tax rate will be offset by
new taxes on investment income, income-
splitting via dividends, and capital gains via
surplus-stripping". Tax experts are now bracing
for what they believe to be an even more
complicated system of taxation, which will
"boggle the mind."
So yes, it is good for the government to
recognize the role passive investment plays in
business and retirement planning. However,
tax accountants and other analysts will need
time to review the entire package of changes
to determine their actual impact on Canadians
and small business. In the new year, we will
also see how mortgage rule changes will
impact borrowers, and the magnitude of any
reverberations in the real estate market and
the economy as a whole.
Tax experts are now bracing for
what they believe to be an even more
complicated system of taxation, which
will "boggle the mind."