Small businesses are the backbone of our economy. There has been a recent federal tax proposition eliminating income sprinkling, which allows incorporated small businesses to shift income to family members who don't necessarily work for them. By doing this, the money they earn and shift to family members may be taxed at a much lower rate, as small business taxes are much higher then personal tax rates.
Currently, the provincial small business tax rate is the second highest in the country but the recent change that is being proposed will make it even more difficult for small business owners to thrive. It will cause more local businesses to shut their doors.
There are over 6,200 small businesses in Prince Edward Island, which accounts for 98.4 per cent of all businesses in the province. They not only help employ the young people of the community, but are also the ones who sponsor most local events.
I feel the new tax proposal is unfair to small business owners who work day and night and who have dedicated their lives to their business. This tax proposal is targeting the wealthy although it is the small business owners who will be significantly worse off as a result.