Perhaps with the TSX down 10% during the last four trading days, people can get a better appreciation of what it was like and continues to be like for income trust investors who believed Stephen Harper when he solemnly pledged he would never raid their nest eggs by taxing income trusts. These folks experienced a 17.8% drop in the value of their savings. A loss of retirement savings that is perpetuated to this day.
That precipitous move by Harper and Flaherty is the largest loss willfully inflicted on citizens by any government, ever. It has cost 2.5 million Canadians over $35 billion of their life savings and every tax paying Canadian the loss of $1.4 billion in ANNUAL taxes to date .
I think Stephen Harper has a penchant for nuclear meltdowns. He is not fit to lead our country. Difficult times calls for competent and steady leadership. Not shoot from the hip dogmatic nonsense, which in the case of income trusts, Stephen Harper was spoon fed by lobbyists , Gwyn Morgan, Paul Desmarais Jr and Dominic D’Alessandro
Calculation of $35 billion loss:
The income trust market closed on October 31, 2006 at 164.86 as measured by the S&P/TSX Income Trust Index. On the evening of that same day, Finance Minister Jim Flaherty announced that he would introduce a 31.5% tax on income trusts. Two days later the index was at 138.21, This represents a loss of 16.2% which on a $200 billion market represents a loss of $32.5 billion. Two weeks later the index was at 135.51 representing a loss of 17.8% or $35.6 billion.
Monday, January 21, 2008
Imagine if the TSX were down 17.8% and it WAS the government's fault?
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8 comments:
The S&P/TSX Income Trust Index stands at 129.98 as of right now--down 21.1% from the levels of Oct 31st 2006.
Not only did we have to sustain the Flaherty attack , but now we are dealing with the effects of the present correction.
The third Monday in January is considered the worst & most depressing day of the year--I now know why.
Mike.
Right on Brent, your short article nicely puts IT in the terms necessary for the common person to understand.
The inneptitude of the current Government and of Flaherty and Harper needs to be exposed. They are over their heads and must go.
Thank you for helping to inform Canadians of the truth.
ATB
John
IS THE FLAHERTY TRICK A DONE DEAL OR CAN IT BE REVERSED ? B.H .
The answer to BH is yes --it can be reversed.
The Liberal proposal is as follows:
After hearing from numerous witnesses at the Standing Committee on Finance, the Liberal Opposition has a plan. It is proposing that the government repeal its planned 31.5 per cent tax regime and replace it with a modest 10 per cent tax, to be paid by the companies, that would be refundable to Canadian residents. The tax would be imposed immediately with the revenue shared equitably with provincial governments.
Underpinning the Liberal proposals are four main policy objectives that should have been considered by the government:
• minimizing the loss of savings for Canadians who invested in income trusts;
• preserving the strengths of the income trust sector, notably a high-yield instrument for savers and for the energy sector;
• creating tax fairness by eliminating any tax leakage caused by the income trust sector; and,
• creating tax neutrality by eliminating any incentive to convert from a corporation to an income trust purely for tax purposes.
The Liberal Opposition also proposes that the ban on new trust formations be continued, but that the government should commit to considering representations from sectors which can conform to the policy objectives listed above.
Mike.
As of today the income trusts are down, by actual calculation for each trust, $47.952 billion since Flaherty's Folly.
The CPP income trust holdings are down by $348.7 million since the "Folly"
Nice job Jimmy.
Another Analogy
To any Harper, Flaherty or CON Party cronies, cheerleaders or sycophants, I also add the following analogy:
A little while ago you bought a home in Alberta for $300,000.
Perhaps you even had to take out a mortgage, or perhaps you used the equity in your home for a reverse mortgage or a homeowner's line of credit.
Maybe you thought you could sell it in a few years at a small profit to purchase a slightly better home elsewhere or to sock away the money for retirement.
Whatever.
A number of months earlier, there were political rumblings about taxing people's large gains on the value or sale of their principal residences in the Canadian West.
After all, why should these large gains not attract tax. That would be unfair, since virtually all other gains and profits are taxed.
But this was contrary to years of precedence, where gains in the value of owner's principal residences were basically tax-free (unlike profits and distributions that were always taxed in the hands of owners of businesses such as limited partnerships or income trusts).
Anyway, there was an election, and the party that promised to keep the status quo and to never tax people's gains on the value or sale of their principal residences in the West won to form the government.
Then only months later - and after you felt comfortable purchasing or keeping your home in Alberta - the government breaks its word and institutes the very tax that it promised to never bring about.
As a result, the home you purchased in Alberta for $300,000 drops in value overnight to $250,000, for a loss in value of $50,000 or 16-2/3%.
But in the Canadian East, where the new tax does not apply, homes keep rising in value by 15%.
Are you mad as hell?
Do you feel betrayed?
Do you feel you were lied to?
Do you feel something is wholeheartedly wrong?
Robert,
Those didn`t happen to be Conservatives , were they????????????
mike.
Mike:
Would Mr. Clean (Stevie Harper) break a promise?
Would Little Troll Man (Jimmy Flaherty) lie to Canadians?
Would Con Party Cronies (CPC) blindly endorse such treachery and treason?
We must TRUST that they are looking out for us.
Of course, though, my tongue is permanently stuck in my cheek.
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