A majority (95%) of tax professionals and small business owners say the proposed federal tax changes will hurt middle-class business owners and their families, according to a survey by the CFIB.
Dan Kelly, president of the CFIB, will present the new data to the Standing Committee on Finance in Ottawa today.
“The government is trying to convince the public that these proposed changes are meant to support the middle class – that they are only targeting high-income business owners,” he explains. “The reality is these are broad-brush proposals that are going to affect businesses at every income level across the country.”
One of the government’s proposals would make it more difficult for small businesses, including family-run ones, to share income with family members. The survey notes this change would affect two-thirds of small businesses, including more than 50% who share income with a spouse.
Another proposal would limit a small business owner’s ability to keep certain investments in his or her business as a safeguard against future emergencies or economic downturns. Notably, 65% of small businesses hold some form of passive investment in their companies, most commonly income from property or land.
These two changes would affect the majority of small businesses in Canada.
“These aren’t loopholes for the wealthy, as the government claims,” says Kelly. “These are legitimate ways for small business owners to grow their business, ensure the stability of the firm during uncertain times, or save for the retirement. Without these measures, businesses will not be able to create as many jobs for Canadians.”
Other findings include:
- 88% of business owners indicate that the proposed changes will make it more difficult for their small business to grow and create jobs;
- 95% of tax practitioners say the proposed tax changes will further complicate the tax system and increase the cost of tax compliance for their small business clients; and
- 94% of small business owners and 95% of tax practitioners do not support this set of tax changes.
About the survey: The online survey of CFIB members included two samples: 8,553 business owners and 410 tax practitioners. The survey was conducted between September 6 and September 14.