Commentary on Recent Tax Proposals

At this point, I am chiming in like many friends and acquaintances on recent tax legislation pending in Ottawa. Realize, I make these comments as someone with a progressive socio-economic-political ideology.

Earlier, my friend, Andrew Younger posted comment on the controversial, proposed federal tax changes. Andrew made an extraordinarily valid point, one that I take to heart as someone practicing tax litigation: allowing CRA to dictate execution of a tax law, rather than permitting for more exacting legislative oversight and detail, can be a recipe for disaster, allowing for no consistency (from office to office, and region to region) in application of these tax laws.

CRA will act as it prefers, thus leaving the taxpayer to struggle against an often unyielding administrative bureaucracy, only to be followed by a court challenge. Many small business owners lack the resources and even the wherewithal to surmount such challenges. Yet, this is what Mr. Morneau’s proposal does; it allows CRA the ability to continue to dictate how it acts, and to make initial interpretations on the ambiguities of virtually any law can only result in disparate outcomes. Although the rhetoric of MPs can be used later in court to argue regarding legislative intent, the damage has already effectively been done to those who wrongfully fall victim to CRA scrutiny.

Of course, Mr. Morneau could ensure greater fairness by also, simultaneously, codifying the Taxpayer Bill of Rights so as to remove it from mere CRA ‘lip service’ to providing actual, bona fide, affirmative protections to taxpayers. Yet, there seems to be no known proposal on Parliament Hill (aside from a member of the official opposition, of all sources), to do so.

In closing, I do not know whether or not these proposals will bring greater equity to the process — I do know that, based upon my above comments, as well as the income floor for those subject to the new policies post-implementation — that the Feds have failed to (1) conscientiously consider long-term impact; (2) tailor their message effectively to counter the current, seemingly overwhelming rhetoric in opposition to these proposals; (3) construct policy that will not become the subject of administrative/CRA abuse; and (4) carefully consider the overall impact on the vast majority within the small business community that struggles consistently to earn sufficient income to support families and to — unlike those with secure pensions and other benefits — put away funds for the prospect of retirement.

https://www.canada.ca/content/dam/cra-arc/migration/cra-arc/E/pub/tg/rc4417/rc4417-12-13e.pdf