New business taxes creating ‘a whole new group of losers’
One pain point for business are the changes to passive income rules. Some businesses are hit hard by the changes, because they have a huge income, or they were saving up to cope with certain business conditions. Now, they are paying more taxes, because their income is over the new threshold. For instance, some business’s franchise agreements require them to set aside some money for renovations every few years. Also many doctors use passive income to pay for clinic improvements. These businesses will now need to lay off staff and/or cut hours.
“Most of them have made no changes to their business practices, and I firmly believe that many of them will get a rude awakening once their tax file is passed by the CRA”