Feds salami slicing

In the business world it's known as 'salami slicing'. It refers to the practise of skimming off a small amount of money and diverting it to another account, often resulting in a significant windfall of money.

of the most notorious schemes involved skimming from bank accounts and from stock trades. In the bank account scam, a banker was rounding accounts up or down by a penny or two. With access to thousands of accounts the money soon added up to a high six figures amount. The scam worked because the amount being skimmed out of the account was too small to trigger any of the security systems.

The second, and perhaps most lucrative scam involved skimming from stock trades at a time when stocks were traded in fractions of 1/8th. One enterprising fellow was again rounding up or down and diverting the eights to his own account. It was reported he made several millions of dollars before being discovered.

the federal government is embarking upon its own version of salami slicing. Their scheme involves Employment Insurance overpayments.

Occasionally overpayments of EI are made, and when the mistake is discovered, the government expects the money paid by mistake to be repaid to Ottawa. This would seem to be only right and fair.

But EI payments are considered taxable income and the federal government wants to make sure it gets its share of tax revenue. Again only fair!

The scam comes when the money is repaid to the government. It still deems the overpayment as income and still wants the taxes. Thus the taxpayer ends up paying taxes on income which he never received. This is totally unjust.

It is time for the government to change this inherently unfair system and begin reversing the taxes paid on this phantom income.

Frank Likely is a retired Anglican minister who lives in Springhill.