I recently read an article on Bloomberg’s website entitled, China Tells Entrepreneurs They Must Put Patriotism Over Profit (https://www.bloomberg.com/news/articles/2017-09-26/china-tells-entrepreneurs-they-must-put-patriotism-over-profit). The Communist Party’s Central Committee and the State Council said in a joint statement late Monday that patriotism must be the highest priority in entrepreneurship.
In my opinion this policy is not so different from the proposed Liberal tax changes for Canadian private corporations.
Entrepreneurs are the driving force of the Canadian economy. They take risks; they fail; they put their family’s assets at risk. At times they succeed. When they do, it is often by bringing competition, innovation and productivity gains. They build businesses that create wealth. They hire employees and in so doing strongly support the economy. It is no secret that small businesses are a major contributor to the Canadian economy. Prime Minister Trudeau and Finance Minister Morneau would like to bring changes forward to the way businesses are taxed.
Canadian Private Corporations and business owners should not apologize for being successful. They should not be shamed for increasing their wealth. They do this by strongly contributing to the Canadian economy and employing Canadians. The tax system in Canada has been built to encourage this success in recognition of the very significant contribution small businesses make to the economy. Tax revenues increase when businesses succeed, Canadians are employed, and consumer spending increases. The proposed policy would have the opposite effect.
The Canadian Centre for Policy Alternatives says just 0.7 per cent of Canadian families are going to be impacted by the government proposal to not allow businesses to sprinkle income to other family members. It is true that many businesses do not reach a level of success that allows them to benefit from certain tax advantages, but all business aspire to be successful and hope to take advantage of those benefits. They contribute to motivate businesses to be successful.
Canada is not China. By and large Canadians believe in free markets and a free economy. We should celebrate successes and encourage entrepreneurs to incorporate. If encouraged to do so with tax advantages, many will fail along the way but each business owner will be willing to take the risk in order to succeed. They will contribute to employment and economic gains. And yes, they may get richer but so will those who now have jobs thanks to those who took the risk.
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