I wish Flaherty had let BCE and Telus and everyone else become an income trust. In the end I don’t think companies should be paying any taxes at all. That’s right, NO CORPORATE TAXES!!!
The problem is simple: taxation without representation. Companies don’t vote, so why should they pay taxes. Let them distribute their profits to the citizens who do pay taxes and vote on what is to be done with those taxes.
Admittedly that would eliminate the ability of the politicians to use tax law for incentives that drive desirable behaviour (it would also eliminate the ability of politicians to use tax law for favours that drive un-desirable behaviour).
But tax law (all laws actually) suffer from becoming quickly out-dated. What was good five years ago may no-long apply. But a parliament that’s pre-occupied or out of session or in the middle of pre-election campaigning isn’t going to effectively change the laws to suite the times.
Shareholders, who vote at least annually, can always accept changes to the distribution that suit the needs of the company and desires of shareholders. And these days governments (through various social insurance programs) are large shareholders so they would retain a direct say in a company’s behaviour.
Happy Hallow e’en!!!