Hey Canada: Hey Liberals and Bloc MPs: Headline News: Jack Layton and Stephen Harper’s income trust tax is nothing more than a tax subsidy paid by all Canadian taxpayers that induces the foreign takeovers of cash flow Canadian business and energy sector companies. Read all about it!
That’s the irrefutable bottom line. It can not be denied.
Whether this was the intent or not, is irrelevant, as it clearly it is the outcome. An outcome that has seen state oil companies from Korea and Abu Dhabi displace taxpaying Canadians in the ownership of some $9 billion in energy income trusts, billionaires like the Thomson Family and Li Ks Shing acquire trusts and take them private as the means to evade the 31.5% tax and any number of leveraged buyouts of trusts by foreign private equity that will se zero taxes collected in Canada, as was on the verge of happening with BCE. Not only was BCE going to be turned into a junk bond basket case, but that deal would have seen Taxpayers lose $793 million in annual taxes relative to had BCE been allowed to become a trust.
This is the most absurd policy outcome that I have witnessed in my lifetime. All done so that life insurance companies could make Canadians more captive to their inferior investment wares that were unable to successfully compete with income trusts. Toxic junk like Manulife’s Income Plus that became toxic by virtue of the gamblers at Manulife deciding they would pump more profits by taking more risks by not hedging these derivative investment products against their embedded risks. Risks that were not adequately disclosed to shareholders (according to a pending class action lawsuit). Meanhile the NDP’s finance critic Thomas Mulcair is completely unaware of that event that almost saw Manulife go “too big to fail” on Canadian taxpayers, and therefore is blissfullly ignorant of the systemic risks that his party’s position on income trusts has caused. Meanwhile the NDP are complicit in killing an essential means for retirement income for the 75% of Canadians without pensions and the destruction of a new form of “profit sharing” investment vehicle that saw massive tax revenue flow into the coffers of Ottawa from this new democratization of Canada’s capital markets.
The multiple takeovers of trusts by foreigners and the like is harder for the NDP to deny or the massive loss in tax revenue these takeovers have caused. But oblivious the NDP remains, head firmly planted in the sand, while their actions of accepting blacked out documents as proof of tax leakage have them firmly planed in the muck of lying to Canadians about the very basis on which this CON-job policy was “sold” to Canadians, ie with patent lies.
Evidently the NDP is not shy about turning its back on everything that the NDP party OSTENSIBLY represents in the minds of Canadian voters. What deal did someone cut with NDP Leader Jack Layton to get him and his party to support this preposterous policy? Or maybe someone has photos of Jack Layton in some compromising situation? Or maybe he has lost control of his senses, and continues on down a path that puts his political self ahead of the interests of all Canadian taxpayers and the nest eggs of seniors. Maybe the NDP think that a more empowered and enriched Canadian people that will arise from the democratization of the Canadian capital markets will reduce the need for a party for the underdog? So in order to preserve their “amrket share” of underdog voters, the NDP support sweeping tax policies premised on lies of their own telling (ie tax leakage) in order to make these underdogs heel, as opposed to rising up?
Fortunately there is sufficient time to remedy this gross policy blunder as there are still 169 of the original 220 businesses formed as trusts out there. The 51 takeovers to date have resulted in the annual loss of $1 billion a year in tax revenue to Ottawa, and the other 169 trusts currently generate $6 billion in taxes to Ottawa (including deferred taxes from RRSPs that Flahery fails to count, leading to his false tax leakage claim) that will be lost or severly diminished when these businesses are forced to convert to corporations (paying less in tax than as trusts) , get taken over by pension funds (100% deferred tax entities, making Flaherty’s tax leakage claims even worse) and taken private as the means Flaherty gave the pension funds too evade the 31.5% tax, or get taken over by foreigners via tax stripping leveraged buyouts.
That solution is the Marshall Savings Plan,, that will have immense benefit to all Canadians, including Stephen Harper who will be given a face saving outcome, while providing him with $6 billion in found annual taxes to deal with his massive structural deficit. If Harper, or any of the other parties fail to vigorously this extremely elegant solution, that can only mean that they place the interest of those who benefited from this ruse of a tax policy, ahead of the interests of all Canadians.
The presence of the Marshall Savings Plan on the scene is like the tide going out, or as Warren Buffet says; “Its only when the tide goes out, that you learn whose been swimming naked”
At this point, there are a lot of naked political asses that will be on display, if these politicians don’t get behind the Marshall Plan. I fancy seeing none of their political asses, but if I had one ass I’s most like to see naked on this issue, it would be Jack Laytons and the NDP. Given the incoherent nonsense that the NDP’s Thomas Mulciar used to justify his party’s blind ongoing support for a policy that is merely Harper’s way of giving tax subsidies to induce foreign takeovers. What a complete ass.
Saturday, January 16, 2010
Posted by Fillibluster at 4:44 PM