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Lethbridge Herald Newspaper Archives

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Lethbridge Herald, The (Newspaper) - August 28, 1970, Lethbridge, Alberta Friday, August 1970 THt LITHBRID01 HERAID 23 Your Taxes By I. II. Asper A Minor Change Could Cause It is often noted that the tax laws have peivasive effect on almost all areas of human ac- tivity. This is particularly so because of the substantial dif- ference it makes in one's posi- tion when an outlay is deduct- ible from taxable income, or an income is not taxable, or the reverse as the case may be. An example of how the tax system influences one's finan- cial choices may be seen from the change in the law a few years ago which, for the first time, permitted almost all edu- cation tuition fees to be de- ducted from one's taxable in- come. Such expenses would not normally be deductible because they are not laid out as a cost of earning taxable income but are spent in acquiring a capi- tal asset, an education. This 'exception to the rule that capital expenses are not deductible has a powerful effect in one's ability to ac- quire an education. On the av- erage it would probably cut one's real costs by somewhere between twenty and thirty per cent. In this minor way the tax law aids in the accomplish- ment of a socially desirable education more attainable by a larger group in society. BONUS gi PHOTO Newest thing to happen to your color snapshots! Get this, snapshooters who lovs to share color prints! Leave your next roll or certridge of exposed Kodacolor film with us for BONUS PHOTO processing. Get an extra waltel print with every regular print. Makes sharing easy! (Available square-size Kodacolor film, 620.) (ACTUAL SUE PRINTS SQUARE AND 2V1" SQUARE! VALUABLE COUPON OFF ON YOUR NEXT BONUS PHOTO Kodacolor Photofinishing Order from square size negatives only. (only one coupon 1o any order please) Take thli coupon to ony of Ihese Lethbridge Dealers TERRY BLAND'S PHOTOGRAPHY __________710 3rd Avenue Phone 327-2673_______ BOYD'S PHARMACY ITD. ______1644 Mayor Magroih Drive-Phone 328-3760 SKELTON'S PRESCRIPTION PHARMACY LTD. _______424 Mayor Mngrath Drive-Phone 328-3565 STUBBS PHARMACY LTD. 1506 9th Avenue 328-5512 WESTMINISTER DRUG LTD. Westminster Shopping 328-7833 Unfortunately the tax law is not as sympathetic toward the crucially important of further and continuing economic de- velopment. It's quite true that the present rules do provide some tax incentives to spur de- velopment, and as far as they ;o are laudatory, but in the main, the tax system is ad- verse to economic development and new entrepreneurship in many significant ways. One area in which the tax system is negative in its im- pact is that which governs the tax treatment of expenses in- curred in the attempt to launch a new economic venture. This particularly true with re- spect to the legal fees one might expect to absorb in get- ting something started, A few weeks ago, the Australian Tax Board of Review handed down a decision which demonstrates the point, and because of the similarity of Canadian and Aus- tralian tax laws, has equal validity in Canada. The Australian taxpayer de- cided to establish a drive-in movie business. He acquired a site, did some preliminary work on the land and conduct- ed other feasibility tests. Un- der local law, before he could build his theatre, he had to ob- tain a permit from a govern- ment theatre commission. He hired a lawyer to make the application to the govern- ment board. The appilcation was turned down and the pro- ject was abandoned. The law- yer's fee of over was paid and the taxpayer claimed a tax deduction for this expense. The Australian revenue commis- sioner refused to allow the de- duction. .The commissioner's argu- ment, when the case was heart by the Tax Review Board, was the standard one in such cases namely, that the legal expense was not incurred as a cost o earning taxable income (in which case it would be a vali( expense of doing business) bu was laid out to acquire a capi I tal asset, the theatre licence Capital expenses are not gen erally deductible either in Australia, or in Canada. TO FAILURE The taxpayer's submission t the court, though novel in iU approach, was doomed to fail ure because previous judi cial rulings. He admitted tha if the application for th theatre licence had been ap- proved he would have acquire a capital asset, the licence, an in that case all expenses, in eluding the legal fees woul have been on-deductible cap) tal outlays. But since the licence applica tion was refused, no asse capital or otherwise, was ac quired and therefore, he urget the expense of attempting t get into business should in a fairness be deductible, sine anything he might have earn ed from the theatre busines would have been taxable. While the tax court was sym pathetic to his dilemma, beta bound by the law, it had n You know Ranchman's Gln...You met Ranchman's Gin Collins last year... Now welcome hack an old friend. In the fineRanclmn tradition Made by Alberuns for Alberuns using the finest Alberta grown grains. mice but to reject his appeal nd deny him the tax deduc- on for the legal fees. The ime result has often occurred similar circumstances in anada. However, as a partial cure r the anti-development as- ects of this principle of tax w, in 1965 the government mended the Income Tax Act allow taxpayers to deduct om their taxable income all xpenses they'incur in making epresentations to any govern- nent bodies in connection with Gaining licences or permits elating to a business carried n by them. This is helpful but still falls onsiderahly short of permit- ng the tax law to stimulate ew ventures and encourage ew entrepreneurs to enter the world. The deduc- on permitted by the 1965 mendment is only available if le taxpayer is already in busi- ess because it speaks of the xpense being 'incurred in a usiness carried on by the tax- ayer, not one which he de- ares or is about to commence. If the Canadian law were urther amended to permit tax eductions for all costs of at- empting to start new indus- ries, it is reasonable to ex- lect that many more projects han at present would be ex- plored and investigated by new commercial adventurers. At he least, a barrier to new en- erprise would be removed. For country that annually spends everal hundred millions in grants and other aids to new ndustry, the revenue loss suf- ered by Ottawa by broadening he deducibility of all expenses of attempting to establish new Dentures, would be insignifi- cant. The white paper on tax re- brm makes some welcome but still inadequate moves in this direction. As many professional practi- tioners can testify, because of ;he current status of the law a ;reat many potential develop- ment projects are abandoned jy taxpayers chiefly because ie tax'Costs of an abortive at- tempt to launch a new venture are simply too high. A minor amendment to the income tax laws would un- doubtedly resolve the problem and probably result in the es- tablishment of many new busi- nesses, the creation of new profits and substantially in' creased tax revenue lor gov- ernment. (Mr. Asper is a Winnipeg lawyer.) Extend Cable TV Deadline OTTAWA (CP) The Cana- dian Kadio-Television Commis- sion announced yesterday it is allowing more time far firms to meet a government regulations requiring Canadian ownership and control of all broadcasting operations. It announced extension of ex- piration dates for 22 cable TV systems and fcr two Windsor, Ont., radio stations which do not meet the Canadian ownership requirements. The extensions run to Dec. 31. The government regulation is that after next Sept. 1 the com- mission may not renew or amend the licence of any broad- casting undertaking that does not meet the Canadian owner- ship requirement. The comassion said it had reached the conclusion that some extensions would allow ownership changes to be carried out in an orderly manner. Lure-Crop Program Set Up EDMONTON (CP) A lure crop program has been estab- lished in the Bcaverhill Lake, 25 miles east of Edmonton, in an attempt to reduce damage to crops from ducks. The fish and wildlife division of the lands and forests de- partment said they hope the program will entice ducks to feed in a special crop area where hunting is prohibited and avoid harvest crops. The department reached agreements with some farmers to grow certain crops on some of their fields and to leave the swathed crop on the ground for the ducks to eat. Decoys to at- tract the ducks are also set up in the fields. Other lure crops have been established in the Grande Prai- rie area. "BACK-TO- TO SATURDAY, AUGUST -MART 2025 MAYOR MAGRATH DRIVE College Moll 420 6th STREET SOUTH LEADS THE WAY... BRINGING LETHBRIDGE SHOPPERS LOWER PRICES ON INCLUDING GOVT INSPECTED RED OR BLUE BRAND BEEF Guaranteed Meats National Brand Groceries "Garden Fresh" Produce ;