Is This Why Liberals Killed Promise to Close Tax Loophole fo

Is This Why Liberals Killed Promise to Close Tax Loophole fo

Postby Oscar » Sat Jan 07, 2017 11:59 am

Is This Why Liberals Killed Promise to Close Tax Loophole for Rich?

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Hidden pressure from Bay Street big wigs comes to light; New Dems, tax fairness advocates pounce.

By Jeremy J. Nuttall , | January 7, 2016

Jeremy J. Nuttall is The Tyee's Parliament Hill reporter in Ottawa. Find his previous stories here.

NDP finance critic Guy Caron: Liberals dropping loophole fix two weeks after quiet pleading from top financial executives ‘shows the influence Bay Street has over the Liberal Party.’

The federal government reneged on a promise to close a tax loophole used by rich executives after being pressured by some of Bay Street’s wealthiest big wigs, and critics are demanding to know why the public wasn’t told about those exchanges.

“There are many problems,” NDP finance critic Guy Caron told The Tyee.

The top 100 CE0s in Canada took in an average of $9.5 million dollars in 2015 [ ], 193 times what the average person is paid. CEOs and other top executives of big firms can save millions of dollars with the deduction the Liberals promised to change because they take much of their compensation in stocks. Some companies pay in stock at a set price; if that price is lower than market value, the difference is treated as remuneration if the employee sells the stock, but the person can claim a tax deduction for 50 per cent of it.

On Friday, Press Progress, a publication tied to the progressive Broadbent Institute, reported documents obtained through access to information legislation show Finance Minister Bill Morneau received messages from financial elites concerned about the party’s promise to nix the loophole. [ ... ments_show ]

The Liberals’ own campaign literature from 2015 said as many as 8,000 people were claiming an average of $400,000 a year via the loophole.

In 2011 the party platform called it a “disproportionate benefit for the very wealthy” and planned to cap it at $50,000.

One of those who wrote Morneau is former Liberal MP, finance minister and deputy prime minister John Manley, who headed the since-renamed Canadian Council of Chief Executives. It now goes by the name the Business Council of Canada.

“Doubling the tax rate with a retroactive impact on existing options would be unfair,” Manley wrote Nov. 10, 2015. “Allow for a gradual phase-in of the changes.”

Fewer than two weeks later, Morneau announced the changes wouldn’t be retroactive and, according to the Press Progress report, received a thank you letter from Manley. Morneau again wrote back to thank Manley and say he looked forward to working together in the future.

Morneau received other letters from brass at firms like Deloitte and Barclays.


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