Friday, December 7, 2007

Relief from horrible tax law

And this front page story in my other daily had some good news for a small group of taxpayers.

JDS Uniphase workers caught by a combination of bad tax law, investment naivety and the great tech slide of 2000 saw some welcome relief, thanks to local MP Gary Lunn and Canada Revenue.

Because of prevailing tax rules some JDS workers were left owing huge taxes on ‘income’ they never saw a penny of.

People hurt by this appealed for years to the government, to Paul Martin and to their local MPs for relief and received none, until now. In the meantime people lost their homes, families and marriages crumbled and many otherwise suffered greatly under the severe financial stress. Though the relief is no doubt welcome now, for some it came way too late.

Still there are those who think there should have been no tax relief in this case. Since it sets a "dangerous" precedent exposing the government to claims from other taxpayers, critics argue it was a mistake to offer the relief. They do have a valid point. The government was following its own long established rules when it insisted on payment of taxes.

However, to them, I say bullcrap! A tax law that inflicts losses, solely as a result of taxes imposed on ‘in-come’ that never 'came-in', is a horrible tax law. And, precedent schmecedent! If anyone else suffered similar losses due to these patently unfair rules, they bloody well should be compensated as well.

Tax relief, though, isn’t nearly enough. Tax rules need to be changed so that this can’t happen again. And the fix is very simple. As in most other jurisdictions and in most other investment circumstances in this country, unrealized income should not be taxable income. Period.

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