Canadian Prime Minister Justin Trudeau isn’t apologizing for potentially adding to the tax burden of small businesses.
Despite the growing public outcry over tax proposals that many perceive as just another tax grab, Trudeau insists he’s helping the middle-class by eliminating tax breaks that he says only help the rich.
In Saskatoon, Saskatchewan Friday, Trudeau told reporters that his tax proposals will close loopholes used by wealthy businesses — although small businesses are increasingly using these tax shelters and are crying foul very loudly.
“We’re doing more for the people who need it and doing less for the people who don’t,” Trudeau said, suggesting that his government represents the middle class.
“I will make no apologies for this approach.”
But Trudeau is at least admitting the changes are proving unpopular and saying he is listening.
“I’m hearing feedback from Canadians that want to make sure that this does help the middle class…. I’m happy to have discussions and feedback from interested Canadians who want to make our tax code fairer and we’re going to take all of those reflections into account.”
Among their plans, Trudeau and Finance Minister Bill Morneau want to prevent businesses from lowering their tax rate by moving their profits to family members with lower incomes. They also aim to lower the ceiling on how much business income can be converted into capital gains — which is not subject to the higher corporate tax rate.
A growing chorus that includes business groups, tax specialists, corporations and the Conservative oppositon are warning that the tax amendments could be detrimental and possibly catastrophic to the economy and to the middle class that Trudeau constantly appeals to.
An increasing number of Liberal Members of Parliament (MPs) are expressing concerns that the tax changes might prove politically disastrous and are telling the PM that.
Morneau even had a conference call this week with Liberal MPs who say their constituents are calling to complain. Morneau’s response has been to suggest Canadians are misinformed about his plan.