Path: utzoo!attcan!utgpu!watmath!julian!uwovax!gerard From: gerard@uwovax.uwo.ca (Gerard Stafleu) Newsgroups: can.general Subject: GAAR retroactive and immoral? (Was: tax revolt) Message-ID: <3627@uwovax.uwo.ca> Date: 22 Aug 89 12:37:25 GMT References: <117@isgtec.UUCP> <1989Aug20.064223.26979@lsuc.on.ca> Distribution: can Organization: University of Western Ontario, London, Ont., Canada Lines: 31 In article <1989Aug20.064223.26979@lsuc.on.ca>, dave@lsuc.on.ca (David Sherman) writes: > It [GAAR] doesn't make it "illegal to take advantage of loop-holes", > as such (certainly not in the sense of criminal or quasi-criminal > penalties). It provides, in effect, that where you misuse a > provision of the Act or abuse the Act in order to obtain a > "tax benefit", a court can make whatever order is necessary > to negate the effect of what you've done -- that is, for income > tax purposes, ignore the deduction or credit you've claimed, > allocate "your" income to some other taxpayer, or whatever. > The steps the court take are very broad, but you have to get over > the "misuse or abuse" hurdle to fall into GAAR. This is interesting. There is a sort of meta-law for legislation, which states that a law should not be retroactive. If you do something today that the government doesn't like, but there is no law against it, they can pass a law that forbids it tomorrow. What they can not do is pass a law that can punish you for an act that was legal when you did it. (I don't know if this rule is entrenched anywhere; I wouldn't be surprised if "they" had been careful not to put it in writing!) By the sound of it, the GAAR comes close to a piece of retroactive legislation. You do something that the law allows you to do, that is you do not break any laws. However, a judge can then decide that you shouldn't have done it, in spite of the fact that there is no law against it. And then he can punish you retroactively, by taking money away from you. Most people would agree that retroactive legislation is immoral. I wonder, does the GAAR show that tax legislation is inherently immoral (:-)?