Money invested passively inside a small business corporation for the purpose of saving to invest further in the company should not be taxed any higher than it is now. The problem is that few of these small business corporations use passive investment for these purposes. Most of them, especially high income professionals just use them to defer income until they are in a lower tax bracket when they are working less or are retired. Income splitting with a spouse and adult children not involved is just not defensible. Again, the abusers have not been the small business corporations with active involvement by family members (that's easy - just pay active family members a salary reasonable for what they do). No, again many of the abusers have been the high income professionals whose family members are not involved in the business at all who just want to lighten their tax burden. Either allow all income to be split with family members or eliminate income splitting. It's that simple.