That's a rather unique perspective on a share. I have mutual funds. I have shares in Coca-Cola. I've never set foot on the floor and I'm entitled to a dividend by means of ownership. Where that really meets the ground is when families invest in families' companies.
I have clients who are brothers. These brothers both invested in a company. One of them was very interested in running it, the other not so much. About 10 or 15 years ago one of them ceased to be active in the company. He owns half of it. He draws down the dividends.
Two things are going to happen to them under these TOSI rules, and they're quite concerned about them. The inactive brother has been receiving dividends for the last 10 or 12 years, equivalent to the active brother because they're fifty-fifty shareholders. That history will now be used, under the reasonableness rules, to say he has been unreasonably compensated historically because that's one of the three prongs in the reasonableness test. Second, he's not contributed any labour. Third, the initial capital for both of them was quite modest, so he didn't contribute a lot of capital—certainly no more than the other. He's owned half of this business for a long period of time, and under these new rules he will be taxed as if he were making $220,000 a year on any dividends he takes out, yet nothing will have changed in the business.
If he were an arm's-length shareholder, that would be completely unaffected by these rules. The reality is that families start businesses and they occupy different roles, and they set it up the same way as people at arm's-length. Now, under the proposed TOSI rules, those types of family companies will be treated in a very different fashion. Going forward, families will be discouraged from investing in family businesses by these rules.