Canada’s Parliament is a joke. A virtual Salem witch trial, court of injustice

How many democratic institutions around the world pass major legislation into effect without even lifting a finger to determine whether the assertions upon which they are based are true or false?

Well, that’s exactly what happened in Canada when Parliament passed into law the double taxation of “public” income trusts. All other income trusts were left unaffected, thereby targeting only average Canadians seeking to provide for their retirement through use of their RRSPs.

The premise upon which this tax measure was based was the premise that income trusts cause tax leakage. No evidence has been provided by the government to support that thesis. As such, the notion that income trusts cause tax leakage is as credible as a UFO sighting or something akin to the Salem Witch Trials.

Back in the late 1600’s there was much angst on the part of puritanical Massachusetts that their community had been invaded by members of the occult. It was believed that witches had entered their midst. The legal courts of the day sentenced 19 men and woman to be hung for being witches. This was known as the Salem Witch Trials.

The popular techniques of the day for determining whether someone was a witch, was based on the diagnosis of a single doctor’s theory. William Griggs. On that basis these accused individuals were sentenced to death by hanging.

The allegations and theories that income trusts cause tax leakage are as well founded in science as the Salem witch trials. Except this is 2008 and tax leakage is as easily determined a concept as balancing one’s cheque book.

Rather than answer the question of tax leakage head on, and releasing the data behind the 18 pages of blacked out documents, we had the Finance Minister and senior members of the Department of Finance advancing a number of highly spurious and occult-like arguments to “prove” the existence of tax leakage. They divined their occult arguments this way:

Hon. Jim Flaherty (Minister of Finance): “The market reaction to a policy that levels the playing field between income trusts and corporations, that makes them equal, not worse, shows that a built-in tax advantage existed. Otherwise, the investors would not have reacted the way they did. There would have been no market correction.”

So that’s Flaherty’s witch hunt rationale: If you tax something, like an income trust or a house, and it’s market value goes down, it is proof that there is tax leakage. Would the same hold true if the dividends of TD Bank or Power Corporation were double taxed at an additional 31.5%, would their precipitous decline in value prove their was tax leakage from TD Bank or Power Corporation?

What utter spurious nonsense being advanced by people who should know better or who do know better.

The income trust issue is not without its Dr William Griggs. Foremost of whom is Dr. Jack Mintz, a self appointed expert in all things tax leakage related. His independence on this matter is highly suspect, as he is a part of the corporation food chain and a former member of the Department of Finance, and remains part of that food chain as well..

Here was the manner in which Jack Mintz’s logic was invoked by Flaherty at the public hearings. How’s this for lackadaisical logic?

“On October 19, 2006, Mr. Mintz said and I quote: “It is silly to argue that there isn't any tax loss. Everyone knows the reason people go into income trusts is because there are tax benefits. That's the way the law is.”

Silly? Here's what's really silly. Rather than the calculation of alleged tax leakage being some lame exercise in “he said, she said”, the matter of alleged tax leakage needs to be proven in a manner consistent with the important role that Parliament plays in every Canadian’s life.

Alleged tax leakage needs to be raised to the standard of the Auditor General who proclaims that “Parliamentarians need objective fact based information on how well the government raises its funds [taxes].”

So where’s the proof? The Green Party and the Liberal Party are demanding the truth be told about alleged tax leakage.

Prove the case or drop the tax This isn’t Salem Massachusetts 1692. Or is it?

Do Canadians really benefit when lies become enshrined in sweeping tax legislation?