Chronicle Herald: The supposed purpose of the repatriation tax was to fix a broken system that penalized U.S. firms for bringing home the earnings of foreign subsidiaries. If they did so, they were taxed at the full U.S. rate of 35 per cent. The U.S. is now transitioning to an exemption for foreign earnings taxed abroad. In the meantime, the 15.5 per cent one-time tax on past offshore earnings was conceived as a break for firms like Apple, Google and the U.S. banks with large foreign cash holdings. It’s half what they would have paid in the past for bringing these funds to the U.S. It’s also, of course, a huge windfall for the U.S. Treasury.
But applying the same rule to Canadian small-business owners is anything but a tax break. Here, the U.S. is raiding the retirement savings of Canadian citizens and longtime residents in Canada and claiming a right to tax income that was earned in Canada and saved in Canadian companies. To call this a “repatriation” of income is nonsense. These savings have no connection whatsoever with the United States. They are already home, right here in Canada.
It would be a travesty for Finance Minister Bill Morneau to allow the U.S. to force the liquidation of savings held in Canadian companies — and for Ottawa to collect its own tax on this forced sale. The Trudeau government should draw a line here. This “unintended consequence” raid is an unacceptable export of U.S. tax law to Canada.
No comments:
Post a Comment