Biggest Tax Changes In 40 Years Would "Punish" Small-Medium Business Owners

Local business owners continue to lose sleep over the federal government's proposed tax changes, the biggest changes since the 1970's.

The proposals could have wide-reaching implications as they're squarely aimed at private corporations, small to mid-sized businesses, which many consider the backbone of the economy. Large Public corporations are not targeted.

"It's all about private companies, of which Winkler has many," FCPA, FCGA Dale Gislason explains.

One of the changes to the tax code is aimed at limiting the amount of income private corporations can split with family members who are not active in the business.

"But of course, they've gone about it in a ham-handed manner," Gislason says, as they try to measure the taxation of outputs based on inputs, measuring tax levels by effort or hours put into the business.

"In the entrepreneurial world that doesn't work," he says. "An idea that could generate millions could take an hour to figure out, and somebody could be working 60 hours a week and not make any progress whatsoever, how do you tax that output fairly?"

While the government says they're closing loopholes, Gislason says these principles have been standard planning for nearly 40 years.

"In trying to be fair, they've been unfair. They've targeted a sector of the job-creating economy in an unfair way," he says. "It's not about loopholes, they've gone well beyond that and introduced a lot of uncertainty."

He notes the government has also chosen to hold a very small consultation period, 75 days, in the middle of summer when many are on holidays.

"The period for response is very short," Gislason says.

The second major change in the proposals target taxation on passive income earned from corporations, comparing the business owner with someone on a salary and measure the saving ability of the two and tax them accordingly.

"They're sort of missing the idea that there's risk involved on behalf of the business owner," he says. "There's sacrifice and often years they don't draw a fair level salary."

Winkler Chamber of Commerce President Kori da Costa calls the proposed tax changes unfortunate, "seemingly a form of punishment for pouring your heart, soul and family into providing a successful and profitable business for communities."

She notes the government appears to be frowning on family members working together, and instead discouraging generational family businesses.

Even if businesses remain profitable enough to survive the harsher tax climate and save for retirement "you will then be taxed higher because you earned more money than needed."

"As an advocate for businesses both at my desk and as part of the chamber, I am sincerely disappointed in the government for the proposed changes and am fearful of what this may do to the middle class profitably of the businesses that we support."

To raise awareness on the Federal Government's proposals the Winkler Chamber of Commerce is hosting a Q & A forum with tax experts.

"It's important private business and business owners mobilize and make their concerns known," Gislason says.

The event takes place Thursday, September 7 at the Quality Inn in Winkler from 9 a.m until 11 a.m.

In Altona, a similar event takes place on the same day, September 7, from 11:30 a.m to 1:00 p.m at the Altona Curling Club Lounge. A light lunch will be provided.