Kim Resources@2x

Kim G C Moody’s 1-1-1 Musings For August 2, 2023

One Taxation Comment – The Need For A Tax Designation

I’ve written on this topic many times over the last decade, including a recent blog on this website that I encourage you to read.  I won’t repeat my previous writings here but suffice it to say, Canada needs to follow the lead of the UK, Australia, South Africa and other countries that have a tax designation.  In my view, the public is better protected and able to identify tax specialists when a tax designation is available. In addition, young practitioners who work very hard to distinguish themselves from their CPA/legal peers should have the recognition that tax is a unique and specialist area.

 

Whenever I write or comment on this, the usual comments I get are:

  1. Kim…I’m a lawyer/CPA…I have training in tax and/or am able to navigate the law (which the Income Tax Act is a statute and thus I’m able and qualified to practice tax).”

KGCM Brief Rebuttal – Short rebuttal….nope.  Just because you’re a lawyer and/or a CPA does not give you the training and/or experience necessary to practice in this area effectively – arguably the most difficult subject in the world.  You’re going to have to dig a lot deeper to convince people like me that the public is better protected by a simple CPA designation and/or becoming a lawyer.

 

  1. “Kim…most CPAs and/or lawyers know their limitations and farm-out taxation to specialists when they know they are out of their depth. Accordingly, no need for a designation.”

KGCM Brief Rebuttal – I do agree that most CPAs and/or lawyers know when they are out of their depth.  But a tax designation is not for those people.  It is for the public.  And for the new practitioners who deserve to stand out from their peers.

 

  1. “Kim…the Big Four Accounting and Big Law Firms Will Never Support That.”

KGCM Brief Rebuttal – Yep, that might be true.  The Big Four and Big Law do a great job at providing many great services.  But many team members of the Big Four/Big Law feel that tax is their sole domain and smaller practitioners cannot compete effectively.  Obviously, I disagree…they’re not the only ones who know tax.  Frankly, there are many excellent tax practitioners outside of the Big Four/Big Law.  Tax should not be the sole domain of, nor should they have overweight influence on the legal/accounting professions.  Only continued efforts will make progress on this issue.

 

  1. Kim…I’m a general practitioner and tax services help my practice flourish. A tax designation would harm my practice.”

KGCM Brief Rebuttal – yes, I agree.  Tax services sell.  But if you’re concerned that it could negatively affect your practice, why wouldn’t you simply get the tax designation?

 

  1. Kim, if you know history, you’ll know that there have been previous attempts in the last two+ decades to bring in a tax designation, and those efforts failed. Any new effort will fail again.

KGCM Brief Rebuttal –   Any worthy objective is likely to be challenging.  Every failed effort has lessons to be learned from and acted upon.  The simple fact that there have been previous failures is not a reason to not move forward again.

There are a variety of other arguments against a tax designation.  But suffice it to say, I’m still convinced that a tax designation is in the best interest of the public and to help attract excellent young professionals to this complex area.

 

One Comment About Leadership – Do You Need To Be Likable To Be A Good Leader?

I posted a video about this topic last week.  In my opinion, it’s obviously helpful to be likable to be a good leader.  But is it necessary to be likable to be a good leader?  My opinion is “no”.  Inevitably, good leaders will need to make tough decisions, and often such decisions are unpopular.  And will result in the leader being unlikable to some.

The most common comments I get about this topic is:

Kim, you definitely need to be likable to be a good leader.”  Or – “A fair leader will always be likable.” Or – “A good leader needs to be respected and thus that will make him/her likable.”

KGCM Brief Rebuttal – Well, I don’t agree.  But that’s ok. There are many opinions on this topic.  But the main reason I disagree is that leaders shouldn’t consider likability when making difficult, necessary, and “right” decisions.

 

One Comment About Economics – Housing and Immigration

In recent years, the federal government has brought in many taxation changes that target housing issues.  Some of the recent amendments include:

  • The redundant and ridiculous anti-flipping tax which taxes dispositions of a residential property that is held for less than 12 months – with certain exceptions – as fully taxable profits as compared to a capital gain (which would negate any principal residence exemption claim even if the disposition gain was otherwise eligible). This is totally unnecessary given the existing law provides the same result for “property flippers”;
  • A ridiculous ban on foreigners from purchasing Canadian real estate; and
  • A new tax on “underused housing” that results in unnecessary reporting burdens on Canadians who are exempt from the tax. If taxpayers don’t comply with the reporting – even though they are exempt from the tax – they are subject to a minimum $5K penalty per omission.

A common theme here is that Canada has a housing shortage and, apparently, foreigners are a significant contributor to the problem.  I’m not buying it.  Instead, I think Canada’s housing shortage and rising price problems are a combination of several factors.  One of the factors – but certainly not the only one – is Canada’s commitment to increased immigration.  While immigration is very important and a key contributor to Canada’s success, it needs to be done carefully and methodically.  One of the major considerations is to ensure that new immigrants have a place to live. And that they are given every chance to succeed.  Canada’s housing starts are not keeping pace with scheduled immigration. This, at face value, is a problem and needs to be carefully considered overall.  It’s past time to take this into consideration.

 

Bonus Comment – Quote From Lao Tzu, Philosopher and Writer, About Being a Leader:

“A leader is best when people barely know he exists, when his work is done, his aim fulfilled, they will say: we did it ourselves.

Yep – totally agree.

And, with that, Leaders go do the necessary work to be barely noticed.

 

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