Finally....

[Jay-mo]

Predictable, ill-informed, hysterical rantings by people who still haven't bothered to read or understand what is being proposed and who may be affected.

I agree with the NFU statement that "If a farm is prosperous enough to clear well over $200,000/year after all expenses are paid (including salaries), it should not be a hardship to pay taxes at the same rate that someone would who earns that much money in a salaried position."

How can you argue with that? Why should farmers not pay the same rate?

Another example of the leftist liberal mindset.
Why not advocate to lower taxes on the salaried position to make things "fair"?

[Hamloc]

Predictable, ill-informed, hysterical rantings by people who still haven't bothered to read or understand what is being proposed and who may be affected.

I agree with the NFU statement that "If a farm is prosperous enough to clear well over $200,000/year after all expenses are paid (including salaries), it should not be a hardship to pay taxes at the same rate that someone would who earns that much money in a salaried position."

How can you argue with that? Why should farmers not pay the same rate?

Grassfarmer, are you suggesting that farmers should not be allowed to be incorporated? All salaries including those paid to the owner under the corporation are obviously taxed at personal not business rates. One example where the lower tax rate on farm earnings is needed is land payments. These are made with after tax dollars. On a $500000 loan on land with payments of over $3000 a month the difference between the pre-tax dollars with a 35% personal tax rate and a 14% small business rate is quite substantial. Now you could argue land is way overpriced due to speculation and I would agree 100%. If we could keep pension funds and land speculators out of land purchases this would certainly help. As for your support of Trudeau and Morneau, both the proverbial 1 percenters, these rules won't affect tax payed by either. As for your belief that farmers should pay the top personal tax rate that in some provinces exceeds 50% on their net income makes me question your business acumen, this would make growing the business difficult if not impossible.

[tweety]

What about the change that taxes anyone passing farm to children MORE and non related buyers LESS?

Can you explain this please? What changes make this happen?

[Hamloc]

One other thing Grassfarmer, I see that on the CBC website the Premier's of Nova Scotia, Newfoundland and Manitoba, as well as BC's finance minister have all spoken out against these changes, concerned about the consequences. Now you seem to believe those of us who disagree with these proposals are narrow minded or misinformed, do you feel the same way about the Premiers? There are times when a person can look in the mirror and realize that you might be wrong. This has happened to me more times than I can count.

[sumdumguy]

When people talk about the low tax rates corporations pay they fail to include the fact that the money is taxed again when the shareholders take it out personally. You are just delaying or postponing the tax in a corp. When you retire whether you take it out as salary or dividends you may pay another 54% on top of the 18% that the corp paid in the past. Dividends are grossed up so that there is no real tax advantage.

[burnt]

You guys gotta quit being so stubborn just cause it's grass farmer and nfu. I don't like the NFL either but that statement is pretty good. There suggested changes are spot on, keep the investors out of our land base, help young farmers, higher cap gains exemption - pretty tough to argue against that???

It's right about getting farmers all riled up over something they don't understand. I've been thinking all week we are just looking like a bunch of winers.

FJ the comment about paying MORE to transfer to the next generation than strangers is fear mongering started by someone with absolutely no truth behind it. It may cost more tax than it does now but not more than selling out.

Well GDR, you might be right about not all of us understanding all the details of the "proposed" tax changes - it's true. (Just an aside - do you think PM sock puppet boy understands them all?)

It is also true that not all of us understand all the details of many of the things we use on our farms on a daily basis.

So that is why we have a list of experts on whose advice we rely, such as accountants. Although we are now a small-scale farm, we have always employed the services of a highly acclaimed accounting firm that provides service to a clientele both national and international.

And this firm is consistent with many (if not all) others in explaining how this will negatively impact our farm operations as well as transfers to the next generation - incorporated or not.

So if you want to counter their advice, please show us your credentials and explain how all the other qualified voices are wrong.

And if grassant has given you a pat on the back saying you show common sense, you might want to head for the shower post haste before the stinking residue dries on and rethink your position.

[burnt]

Can you explain this please? What changes make this happen?

Ask your accountant. That is exactly what mine told me as well. And this was confirmed by another accountant with whom I asked the same question.

It appears to be part of the leftist strategy to disrupt ownership of land based on family-structured succession.

If someone would be intent on creating a society of pliant fools and useful idiots (supposedly coined by Lenin), what better way to arrive there than to orchestrate the breakdown of society by attacking the nuclear family and those systems which support it?

The profound value of the high-quality training received on family farms is well known.

So, that has got to be stopped.

This is an open and undisguised economic attack on traditional values. The moral coup has been accomplished long ago.

And grassant supports this movement.

[grassfarmer]

On a $500000 loan on land with payments of over $3000 a month the difference between the pre-tax dollars with a 35% personal tax rate and a 14% small business rate is quite substantial.

"The proposals would not affect taxation of farm profits that are invested in equipment, land or other assets that help the farm become more productive." (From the NFU website.)

[furrowtickler]

Just need to point something out here ...
Say the farmer makes $200,000 as said , he most likely spent over $1,000,000 on total inputs into the local economy...
The wage earner spends zero to earn his $200,000 relative to the farmer .
Most people forget that little tid bit of info or completely ignore it .
Also that farmer can make zero the next year and still have to spend $1,000,000 on total inputs into the local economy supporting many many jobs while he is called a whiner if he says anything at all by the likes of grassfarmer , or the wage earner who still gets his $200,000 without having to spend a dime to earn that other than fuel to get to work and back .

[farmaholic]

I had a quick chat with our accountant. And these are the things he said they are trying to change.

Income splitting and sprinkling....paying wages to spouses and children for work they aren't doing or incapable of doing. Remember everyone can earn their personal exemption tax free,,,, so if your paying kids about $11,000 for doing nothing? But I don't know many farms where the kids do nothing, I can see this being the case where incorporated "professionals" are paying their kids or spouse who are doing absolutely nothing. How do you prove it? Phony record keeping of days and hours worked? Then there is the acid test of does the compensation(pay) equal the amount and quality of work done by those receiving the split or sprinkled income.

Passive corporate income. Income in a corporation that has a pile of retained earnings in cash that is invested in stocks and bonds or other non-active income and the investment income is taxed at corporate rates instead of personal tax rates. I think holding companies are also a target for this sort of thing.

And something about people receiving shares in a corporation without having bought into it or being actively involved in it then receiving dividends from such.

I know there are people on this site who would have a better handle on it than I and could do a better job of explaining it that me. Our accountant actually told me what we are doing now and the way we are going, these proposed changes will have little affect on us. Unless I want to give a piece of a whole farm to kids that haven't bought in or actively involved in the farm corp and would receive dividends.


Can anyone verify or add to this.

[Hamloc]

Just need to point something out here ...
Say the farmer makes $200,000 as said , he most likely spent over $1,000,000 on total inputs into the local economy...
The wage earner spends zero to earn his $200,000 relative to the farmer .
Most people forget that little tid bit of info or completely ignore it .
Also that farmer can make zero the next year and still have to spend $1,000,000 on total inputs into the local economy supporting many many jobs while he is called a whiner if he says anything at all by the likes of grassfarmer , or the wage earner who still gets his $200,000 without having to spend a dime to earn that other than fuel to get to work and back .

Like and agree 100%. I am a relatively small operator but as an example I spend probably $40-50 thousand on machinery repairs per year. Every parts department I visit has as few as 3 parts people but some have 5. All these employees jobs depend on people like me wearing out and breaking farm equipment. There is no doubt the net a farmer casts covers a much larger area to end up with $200000 left at the end of the day.

[wmoebis]

Just need to point something out here ...
Say the farmer makes $200,000 as said , he most likely spent over $1,000,000 on total inputs into the local economy...
The wage earner spends zero to earn his $200,000 relative to the farmer .
Most people forget that little tid bit of info or completely ignore it .
Also that farmer can make zero the next year and still have to spend $1,000,000 on total inputs into the local economy supporting many many jobs while he is called a whiner if he says anything at all by the likes of grassfarmer , or the wage earner who still gets his $200,000 without having to spend a dime to earn that other than fuel to get to work and back .

If the farm is incorporated the farmer is the wage earner and exactly the same. The Co farm spent the money to pay the farmer not the wage earner. Wage earners don't own the co and get the rewards when it is sold or dividends paid out.

[farmaholic]

I've often thought the same thing furrow....


Never have so many relied on so few.... in many ways!

[vvalk]

Just need to point something out here ...
Say the farmer makes $200,000 as said , he most likely spent over $1,000,000 on total inputs into the local economy...
The wage earner spends zero to earn his $200,000 relative to the farmer .
Most people forget that little tid bit of info or completely ignore it .
Also that farmer can make zero the next year and still have to spend $1,000,000 on total inputs into the local economy supporting many many jobs while he is called a whiner if he says anything at all by the likes of grassfarmer , or the wage earner who still gets his $200,000 without having to spend a dime to earn that other than fuel to get to work and back .

Never forget farming is one of the few industries that creates wealth from nothing. Vast majority of jobs just distribute or rearrange wealth. Eg. Service industry, any professional service and obviously government

[Jagfarms]

Copy and paste below of some information regarding the proposed tax changes


"Someone has done some serious digging and has come up with the real reason for"tax reform". Props to John Gormley as I swiped this comment from his thread earlier today:

John Gormley are you aware of this?

It's becoming clear that some very wealthy Canadian shareholders tied to Finance Minister Bill Morneau are positioned to benefit handsomely from the proposed federal tax changes for incorporated small businesses and professionals. As Canadians, we should be paying very close attention.

Just yesterday my husband and I learned about pension-type savings options for small business owners called Retirement Compensation Arrangements (RCAs) and Individual Pension Plans (IPPs, geared more towards business owners in their 50s).

These retirement savings plans/products were suggested to us as potential next steps if the proposed federal tax legislation affecting small business goes through. (For context, given our incorporated structure, if the legislation is passed, any income we draw when we retire will have been taxed at a rate of 73%. Clearly, this doesn't seem like a fair deal for a lifetime's worth of work, so we—like every other incorporated small business owner out there—are working hard to understand what our options are.)

Today, from an All Nova Scotia article (Sept 19), we learned that the largest provider of these pension plans in Canada is none other than Morneau Shepell.

That's right, Morneau Shepell—the multinational benefits/pensions consulting firm founded by Federal Finance Minister Bill Morneau's dad, William Frank Morneau, Sr. in 1966, with annual revenue in 2016 totalling $592 million Cdn. It's the largest benefits and pension firm in Canada.

Today, William Frank Morneau is listed as honourary chair and founder of Morneau Shepell on the company's website. And Bill Morneau, according to the All Nova Scotia article, "...controls over 2.2 million Morneau Shepell shares worth over $47 million based on the closing stock price on Monday."

If the federal government brings in their proposed tax changes, led by Justin Trudeau and Finance Minister Bill Morneau, incorporated small businesses across Canada will be forced to close their holdings companies and opt instead for other retirement savings strategies... like the private pension plans offered by Morneau Shepell.

So who really stands to benefit from the legislation that's being positioned as changes to make the tax system fairer?

That's right: Bill Morneau, major shareholder in Canada's largest pension corporation. Bill Morneau, Canada's Federal Finance Minister. Bill Morneau, the guy who keeps saying he's closing "loopholes" and "fancy accounting schemes" that give wealthy Canadians unfair advantages over the middle class (...you know, those greedy farmers and doctors and local business owners and such).

While doctors are making calls to healthcare organizations offering jobs south of the border, and small business owners nearing retirement are looking at having to work for several more years, and family farms and businesses passed on through generations face being penalized for passing them down to their kids (and rewarded for selling them to anyone other than their kids), and young couples who've put everything on the line to start their dream business come to terms with the fact that the rug has been pulled out from under them, Morneau Shepell directors and shareholders must be rubbing their hands together in eager anticipation of the windfall to come their way.

If there's a "fancy accounting scheme" that deserves the government's full attention right now, including a thorough Conflict of Interest investigation, I think it's staring them right in the face.