More than 200 people attended a town hall meeting in Blackfalds last night hosted by Red Deer-Lacombe MP Blaine Calkins, seeking information on tax changes proposed by the federal government that one tax expert says will adversely affect private corporations of all sizes. This, he says, contrary to government claims that they will close loopholes on the wealthy.

The crowd, gathered inside the Blackfalds Community Centre, voiced mostly displeasure with the finance ministry's plan.

They heard Kim Moody, director of Canadian Tax Advisory at the Calgary-based Moodys Gartner Tax Law, take aim at three changes.

The first would be an end to what's known as "income sprinkling," when a higher earner will transfer (or "sprinkle") his or her income to a family member (a shareholder in the company) in order to reduce the household's overall tax burden.

Family members that do not meet the definition of active participant in the business would be hit with the highest marginal tax rate. 

"A mom and pop shop, they're sprinkling $30,000 of dividends, if one of those spouses is inactive and doesn't pass the reasonableness test, they're going to be impacted with a huge tax increase. That's not fair," Moody says.

The second would be preventing the conversion of dividends to capital gains, the latter which are taxed at a lower rate, he says.

Third, changes related to passive assets. Moody says this change is to prevent people from accumulating assets like cash, bonds and stocks that are not re-invested into the business.