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In fact, this isn't even about those small businesses who incorporate, but a still smaller subset: those with sufficient income to benefit from the practices the government seeks to limit

Ditto for income sprinkling: you can still pay your adult children out of the corporation, as before. You’d just have to show they were actually performing some sort of useful service in exchange. So we are a long way from the sweeping “attack on small business” or “death of the entrepreneur” of so much purple prose.

That’s not to say that the proposals are particularly well-considered: the government may have correctly identified the problem, but its proposed solutions are cumbersome, complex and intrusive. When Chamber of Commerce president Perrin Beatty thunders that small businesses “will need to prepare to be challenged by the government’s auditors for how they invest their profits, employ members of their family” and so on, he is not wrong.

Likewise for the government’s plan to achieve neutrality between corporate and non-corporate taxpayers in the treatment of passive investments. Right now both groups actually pay much the same marginal rate on this income: the advantage to corporate taxpayers lies in the larger amount of principal they can invest, since it comes out of income that was taxed at the lower small business rate. To offset that advantage, however, the government proposes to tax the return on that principal at a much higher rate, as much as 73 per cent. That’s obviously sub-optimal.

These and other pitfalls could have been avoided had the government addressed the root cause of the incorporation gold rush, rather than the symptoms: the vast disparity between the top personal rate and the small business rate. Were it simply to abolish the small business rate, as the United Kingdom has done, it would go a long way to reducing the tax advantages of incorporation, at very likely the same cost politically. What do they say: in for a penny, in for a pound?