Mr. Sorley McCaughey:

To reduce the effect of the tax rate that is paid is to take advantage of the research and development credits that are offered. It is clearly outlined in this report, which spells out simply how research and development credits are, and can be, abused to reduce the effective tax rate to 6% or lower.

Not only are individuals not able to benefit from deferring tax, but small and medium enterprises also do not have the same advantage that multinational corporations have. This kind of tax avoidance really puts small and medium enterprises at a distinct disadvantage.