So this is why I'll be voting Conservative

Smallc · August 5, 2015

My business has 4 employees and has revenues of just over 2M per year. I make about $45K as an owner. I apparently am not a small business.

msj · August 5, 2015

My business has 4 employees and has revenues of just over 2M per year. I make about $45K as an owner. I apparently am not a small business.

Huh? The 500k is for net income not revenue so what the heck are you talking about?

Also, I net several times what you net on a fraction of the revenue you earn: you should have become an accountant or lawyer or engineer.

blueblood · August 5, 2015

My business has 4 employees and has revenues of just over 2M per year. I make about $45K as an owner. I apparently am not a small business.

Exactly, you pretty much have to be a hair salon out of your basement to qualify for that.

blueblood · August 5, 2015

Huh? The 500k is for net income not revenue so what the heck are you talking about?

Also, I net several times what you net on a fraction of the revenue you earn: you should have become an accountant or lawyer or engineer.

Unless hes paying him himself and having a nice chunk in retained earnings.

Plus overhead on a gas station would eat up a lot of money along with red tape. One has to keep their eye on the futures price of gasoline and the trends or it can be costly

Edited August 5, 2015 by blueblood

msj · August 5, 2015

The small business limit still applies.

And if he is taking wages then that reduces his net income.

Which is why a company that makes $650,000 will pay out the owner $150,000 to bring the income down to the lower tax level.

Of course, if he has over $10 million in retained earnings then maybe he isn't going to qualify on grounds of capital employed, but I doubt that's the case

Edited August 5, 2015 by msj

msj · August 5, 2015

Unless hes paying him himself and having a nice chunk in retained earnings.

Plus overhead on a gas station would eat up a lot of money along with red tape. One has to keep their eye on the futures price of gasoline and the trends or it can be costly

Once again, taxes apply on net income before income tax.

So all costs except for income taxes are deducted before filling out the tax return which then leads to certain adjustments (add back meals at 50%, add back accounting amortization then deduct CCA etc etc).

This is not rocket science.

blueblood · August 5, 2015

The small business limit still applies.

And if he is taking wages then that reduces his net income.

Which is why a company that makes $650,000 will pay out the owner $150,000 to bring the income down to the lower tax level.

Of course, if he has over $10 million in retained earnings then maybe he isn't going to qualify on grounds of capital employed, but I doubt that's the case

Oh for sure. Its a matter of sharpening the pencil and figuring out whats best when the 500k mark has been surpassed.

Smallc · August 5, 2015

Huh? The 500k is for net income not revenue so what the heck are you talking about?

Apparently, I don't know. I'd love to see that, as it's not what I've read in the past. As for what I net - I sell products. Since I took over, it's gone nowhere but up. My parents used to make about 100K on $3M revenue. We have more competition now. I'm thinking this year it will be about $200k total on about $2.5M revenue. It's gone way up this year, and if I hadn't spent $40K doing environmental upgrades last month, I'd be laughing all the way to the bank. That'll have to wait until next year unfortunately.

msj · August 5, 2015

Sure but that was not the case as smallc presented it.

Few people concsistently pay tax rates at high levels in a small business.

Either they get lucky for a few years then sell out, or they grow and become too big to qualify as a small business.

Which is to say that all this talk about cutting the small corporate tax rate is a load of garbage no matter who proposes it.

Has no effect on whether or not I will high someone (since that depends on getting in the work and having the time to do it with and with out staff).

No, if my corporate rate gets cut then it means I leave more in my company to pay at a lower tax rate and hold onto until I retire.

blueblood · August 5, 2015

Once again, taxes apply on net income before income tax.

So all costs except for income taxes are deducted before filling out the tax return which then leads to certain adjustments (add back meals at 50%, add back accounting amortization then deduct CCA etc etc).

This is not rocket science.

Id say having cash on hand is a good luxury to have as its a buffer in the event of a jump/crash in commodity prices, equipment failing, etc etc.

msj · August 5, 2015

Sure, working capital is important to any business.

For a small business they are already paying tax ( if they are profitable at all) at tax rates that are fractions of what that person would pay if he was running as a proprietor.

Why being incorporated is now suddenly so special as to deserve an even lower tax rate is beyond me.

And the realty is that our system is well integrated. So any deduction in the small business rate is just going to be an increase in the rate for dividends (ineligible dividends in particular).

I'm only a little bit better off by earning my income in an incorporated company than if I was a proprietor and put all of my revenue and expenses on my personal income tax return.

Sure, over 25 years it will likely grow into a tremendous asset of several hundreds of thousands of dollars.

But then it's like a RRSP - it's sitting in the company and now I have to pay tax on it as I pull out my dividends and wind down the company.

IOW, the whole thing is a shell game that actually makes accountants like me rich as we charge thousands to do year ends and corporate taxes and file T4 and T5 slips.

Most small businesses are better off not being incorporated but everyone wants to believe otherwise.

Edited August 5, 2015 by msj

Freddy · August 5, 2015

And we can thank Harper's grand design of turning Canada into a petrostate for the big collapse in manufacturing. Every other nation that becomes dependent on oil or on resource extraction in general, ends up dependent on resource exports. The same pattern appears to have happened in Australia, where a couple of Conservative governments put all their eggs into shipping coal and iron ore to China; and now that China's economic bubble has gone bust, so has Australia's! And just like Canada, Australia has allowed their manufacturing sector to wither on the vine and is now more dependent on imports of most manufactured goods.

Here I disagree with you.

If our population is to useless to produce anything, I'm not going to tag that on the back of Harper. People need to get their lazy hands out of their a$$ and simply start making stuff for themselves, instead of buying all their stuff from China.

Who, under 40 years of age, knows how to sow a pair of pants anymore??? The problem is in that fundamental question. Our young population has a hard time cooking a KD box of noodles.

Edited August 5, 2015 by Freddy

blueblood · August 5, 2015

That depends on the small business. For the farm in a growth phase it was a no brainer for us as it helps with stability and frees up money for stuff. As with a farm its much difference than being a lawyer given overhead and succession and the like.

IMO going corporate is good for when things are ezpanding and a good succession plan is in place. If i were a lawyer, i would agree that goingg corporate wouldnt be good at the later stages of the game as when its time to cash in, the tax man has his due...

Smallc · August 5, 2015

Sure but that was not the case as smallc presented it.

I was misinformed. I have no problem admitting when I'm wrong. We pay personal taxes on our business (the net is split 4 ways but with the incomes split 3 way [My parents only take 1 income - I actually make more than I said with that taken into consideration] and so I was only repeating what I thought I had read, as I don't have direct experience with corporate tax rates.

jacee · August 5, 2015

I don't. Most of the people I know don't including many people planning to vote NDP. 100% public health system has just become one of those issues where it has become 'conventional wisdom' that any party that challenges it will lose, thus no party tries, so it never gets challenged which reinforces the conventional wisdom. It's also reinforced by a false dichotomy that there are only 2 options: the US system and the Canadian system.

That's right:

"any party that challenges it will lose"

Harper found that out when his senior core voters threatened to vote NDP if he cut health care.

I wonder what he's promising them this time.

.

jacee · August 5, 2015

In the end, all you're talking about doing is taxing away the money from the successful and giving it to the unsuccessful. That leads, inevitably, to lots of unsuccessful people, and very few successful people. After all, if you work hard to get ahead but it's all taken from you anyway, why work hard to get ahead? And if you do nothing but get lots of money given to you, why do anything? Greece is the result.

No we're talking about taking more money from rich thieves and scoundrels and giving it back to a lot of decent hardworking people raising families on the pittance their thieving bosses pay.

jacee · August 5, 2015

Bollocks! All those other countries are reading their citizens emails, checking browser history's, travel plans, events etc etc. If you're typing certain keywords into your computer, you can bet someone from the government will show up at you house or grab you off the street and make you explain.

The wording may be slightly different, but it's all the same premise.

Oversight and public accountability refers also to who is being detained for what, and what interrogation methods are being used, etc.

The way Harper designed it, all of that is totally under his power, he can detain and interrogate (torture) anyone and is accountable to no one.

.

jacee · August 5, 2015

Yes, our projected growth rate for 2015 is being hindered by a sudden gigantic fall in the price of oil, combined with a multi year depressed market for other commodities, even gold.

Damn that Stephen Harper anyway!

Oh well then ... That's his reason for lying about it I guess. :/ Edited August 5, 2015 by jacee

jacee · August 5, 2015

Thats only up to 500K. Then there are the hidden costs of complying with all the red tape synonymous with left of centre governments. Since the environment and high labour standards are synonymous with left of centre govts, how do you expect a small business to thrive.

Better to go for cpc which is reducing corporate rates and red tape and taxes in general while at the same time helps create a better environment to grow in. Theres a reason the business world shuns the ndp - big and small alike

Big, maybe.

Not small, though. Lots of small business people vote NDP.

.

drummindiver · August 5, 2015

What colour is the sky on your planet?

The Conservatives have more money because most of the wealthy support them. Because their policies primarily support the wealthy.

See how that works?

Ppl with jobs support them ppl who rely on governmental charity, not so much.

Keepitsimple · August 5, 2015

Big, maybe.

Not small, though. Lots of small business people vote NDP.

.

Ask those small business owners what they think of unions......then you might understand why your "lots" is a little, shall I say - misguided?

Edited August 5, 2015 by Keepitsimple

Keepitsimple · August 5, 2015

No we're talking about taking more money from rich thieves and scoundrels and giving it back to a lot of decent hardworking people raising families on the pittance their thieving bosses pay.

Boy, does that ever say a lot about you! There are tens of thousands of "rich thieves and scoundrels" who run small companies that employ 10, 20 or 100 people all across Canada. They are not public companies - they are risk-takers, investing their own money to build something - and by doing so, employ millions across the country. Many businesses fail - especially in these times - and owners can lose everything. Thieves and scoundrels?

TimG · August 5, 2015

Most small businesses are better off not being incorporated but everyone wants to believe otherwise.

You forget liability. I would say anyone running any small business where something could go wrong needs to be incorporated. You are right about the changes to tax rates making no difference small business people who take all of the income they can from the company. That said, keeping savings in a corporation is also a bad idea because these are assets that can be seized if something goes wrong. On top of that any investment income is taxed at the top marginal rate which will likely be higher than it would be in a personal savings account for a small business owner.

Topaz · August 5, 2015

For all you that are voting Harper please state why? Are you voting for the party or the leader more? What do you think of his social program changes and will it affect you? Do you care about the next generation and jobs? What do you think of his Foreign Polices? How do you think Harper could improve himself or the government?

Keepitsimple · August 5, 2015

For all you that are voting Harper please state why? Are you voting for the party or the leader more? What do you think of his social program changes and will it affect you? Do you care about the next generation and jobs? What do you think of his Foreign Polices? How do you think Harper could improve himself or the government?

Argus already made some good points but heck, I'll make myself a target:

1) Party or Leader - probably 50/50. I need to have a leader I can respect. Harper gets mine - and I think Mulcair has the capability of earning it. Justin Trudeau - probably not going to happen. As for the party - it's policies and as I've stated before - "do no harm", especially when it comes to the economy.

2) Social Programs - not sure he's really changed anything except for Healthcare.....and I agree with his approach. For too many years, the provinces came cap-in-hand to the Feds and blamed everything on lack of funding - and as a result nothing got done. People never really understood that the province was responsible for delivering healthcare services - not the feds. The Feds just balanced the playing field with Transfer payments and enforced the rules. Now - funding is set in stone - Provinces know what they are getting and simply have to get on with doing the job. No more whining.

3) Next Generation/Jobs - one of their strengths.....a focus on skilled trades, university research funding focused on commercial capabilities, all the savings vehicles for young people and families.

4) Foreign Policies - people have not fully grasped the change of the last 2 or 3 decades. You can't have diplomacy with the Taliban or ISIS or Hezbollah and to a lesser extent, countries like Iran. Diplomacy is more countries who rationally have an intent to resolve conflict. With those who would destroy everything that democracy stands for - we need to take a clear stand. I understand that makes the faint of heart very uncomfortable - but group hugs don't work with people who chop off heads. Diplomacy where it can make progress - but be prepared to help our allies with a Big Stick. Say what you mean - mean what you say.