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Sep 17

September 19, 2017

This nicety from a Mr. Frank Mills in response to one of my open letters to Finance Minister Bill Morneau, which I posted on the Minister’s Facebook feed in response to his Power and Politics bit yesterday .
 
Mr. Mills: "You are paid with my tax dollars, Doctor, so contribute your fair share to your own salary."
 
My rejoinder: Frank Mills - "Thank you for your comment.
 
First, I do not draw a salary: I contract my services to government as a small businessman would. 
 
Second, as any other small businessperson who contracts their services to government (think bridge builders, etc) I am indeed paid with tax dollars.
 
Third, what I am not endowed with, as salaried government employees are, is anything resembling a benefit package - no sick pay, no vacation pay, no pension, etc - I must provide for all of those things on my own.
 
Fourth, and this is what seems to be lost in this discussion: any money that gets left behind in a small private corporation, while taxed at the corporate rate only, CANNOT be used personally. As soon as I remove those funds for personal use, additional tax kicks in and I pay roughly 50% tax (if I make it to the $150,000 threshold of funds paid out).
 
Define fair however you like, I suppose: the top ten percent of income earners in Canada pay 54% of all income tax collected (2013 numbers, you can look it up).
 
Fair? You decide."
 
What I failed to add, in my response to the good Mr. Mills, is that unlike the bridge builder, I can’t just increase my fees once the government greatly injures my financial position through these tax changes. Those fees are fixed – by government.
 
It’s a lovely little squeeze.

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