Sunday, August 3, 2008

"Income trust decision not a broken promise", Harper says

Dissecting Harper's lame excuse

Re: “Income trust decision not a broken promise, Harper says” Canwest News, November 2, 2006 (reproduced below)

This article reveal much about the inveterate liar that Stephen Harper is and Stephen Harper’s unwillingness to accept responsibility for his personal actions and decisions.

Let’s suspend reality for a brief moment and accept that Stephen Harper’s broken income trust promise was not a broken promise, that doesn’t change the fact that Harper’s policy rational of “tax leakage” is a blatant lie and a manufactured excuse.

There may have been “no leaks”, but nor has there been any proof of tax leakage. In fact tax leakage has proven to be a fraud Not only was there NOT tax leakage before, this policy has CREATED tax leakage.

However there WERE plenty of “deals with friends on Bay Street”...Gwyn Morgan, Paul Desmarais Jr. and whomever these people were that were being cited in the Globe;

“High-profile directors and CEOs, meanwhile, had approached Mr. Flaherty personally to express their concerns: Many felt they were being pressed into trusts because of their duty to maximize shareholder value, despite their misgivings about the structure. Paul Desmarais Jr., the well-connected chairman of Power Corp. of Canada, even railed against trusts in a conversation with Prime Minister Stephen Harper during a trip to Mexico, and told him he should act quickly to stop the raft of conversions, according to sources.”

If there were no “deals with friends on Bay Street”, why did Flaherty admit to this:

“"The income trust decision I will have to live with forever," Mr. Flaherty says. "What I find troublesome, quite frankly, is that I have CEOs of banks, and leaders on Bay Street who have said to me, privately, absolutely it was the right thing to do. But they don't go out publicly and say the same thing.”

As for Harper’s comment of “It was not that we would have no taxes for foreign investors”.....this is a joke. Harper eliminated the 15% tax that foreigners paid on interest to ZERO. Meanwhile how much tax do private equity firms pay????

Income trust decision not a broken promise, Harper says

Allan Woods , CanWest News Service
Published: Thursday, November 02, 2006

OTTAWA - Prime Minister Stephen Harper denied breaking a major election pledge with his government's surprise decision to tax income trusts, saying the party promised only to protect the incomes of Canada's seniors, not the profits of major Canadian corporations and foreign investors.

As the Conservatives and the Liberals warred over the bombshell move, which reverberated all day on Toronto's Bay Street, Harper on Wednesday told the House of Commons his government acted in response to the intentions of corporate giants such as Telus and BCE to convert to an income trust, a designation that allows the company to avoid paying corporate tax and returns higher dividends to investors.

"The commitment," Harper said, "was not that we would have no taxes for Telus. It was not that we would have no taxes for BCE. It was not that we would have no taxes for foreign investors or no taxes for major corporations. It was a commitment to protect the income of seniors."

The Conservative campaign document said the party, if elected, would "stop the Liberal attack on retirement savings and preserve income trusts by not imposing any new taxes on them."

The Conservatives were the only party to make such a pledge in the election campaign and opposition parties quickly produced on Wednesday dozens of old statements from Harper and other prominent Conservative MPs urging the Liberal government-of-the-day not to tax income trusts and promising that a Tory government would never do so.

Nevertheless, Harper's message was reiterated by Senator Marjory LeBreton, the Government Leader in the Senate, who said of the campaign promise: "We were specifically dealing with seniors in our policy platform."

All opposition parties appeared reluctant to oppose the substance of the decision on income trusts, which the government estimated could have cost them at least $500 million in lost corporate-tax revenue over four years. Because the decision calls for a tax to be levied, the opposition would have the opportunity to defeat the government in the Commons by voting against the new measures.

Instead, they attacked the apparent broken Tory campaign promise, which they said risked creating a climate of investment uncertainty in the country.

In question period, the Grits said the decision of Finance Minister Jim Flaherty led to a revolt at the Toronto Stock Exchange, which they referred to as "Black Wednesday," "a Day of Infamy" and a "$25 billion breach of faith."

"Innocent Canadians are suffering an economic bloodbath ... because they believed the prime minister," said Bill Graham, the interim Liberal leader. "He gave his word. Canadians acted on his word. He then broke his word."

Liberal finance critic John McCallum called for Flaherty's resignation, and accused him of having "converted the Canadian capital markets into the wild west."

"This flip-flop by Mr. Flaherty has made our markets a laughing stock," he said.

The Liberals have been under a cloud on the issue of income-trust tax rulings since the Royal Canadian Mounted Police launched an investigation into an alleged leak of a November 2005 decision by then-finance minister Ralph Goodale not to tax income trusts.

The investigation was announced in the middle of the election campaign and was credited with shifting substantial voter support to Harper's Tories.

Goodale's income-trust ruling came just days before the Liberal government was defeated in the House of Commons, but there was heavy investment in a number of income trusts that day and suggestions that government officials may have given Bay Street advance warning of the favourable news.

"There were no leaks, no e-mails, there were no deals with friends on Bay Street," Flaherty said of his handling of the decision. "There was confidentiality, deliberation and the provision of certainty for capital markets in Canada. Finally, there was an effort to create fairness for individual taxpayers and their families."

Conservative MPs and government officials acknowledged that Tuesday's income trust decision was "difficult politics" in the short-term.

"In the long term it's good public policy and I think Stephen Harper, if anything, has a reputation for making the tough choices and the correct policy decisions," said James Moore, the parliamentary secretary for Public Works. "The financial times are changing and this was a large and growing fiscal problem and it was creating a fiscal black hole."

But the tough decision is also a reflection of the reduced role that corporate Canada can play in federal politics, particularly if Conservative legislation to completely eliminate corporate donations passes through the Commons, said Jason Kenney, the parliamentary secretary to the prime minister.

"We've eliminated corporate funding for political parties and we don't think corporations should get away without paying their share, and this is the problem," he said.

CanWest News Service


Truth in Trusts said...

"The tax leakage ramifications of continued and sustained growth in the income trust sector was also assessed using a budget-based approach. Due to the planned federal corporate income tax rate reductions through 2010, there is not expected to be significant escalation in tax leakage over the next five years. Even if the income trust market doubles over that timeframe, the expected increase in the level of tax
leakage is not significant. In fact, a doubling of the market size over the next 5 years would only result in an approximate $30 million increase in annual tax
leakage by 2009

"The government claims that income trusts enjoy an unfair tax advantage over corporate dividends. If they believe this, then the answer is not to shut down a valuable investment vehicle, but to cut the double taxation of dividends. In short, level the playing field and let the market decide between income trusts and dividend-paying companies." Stephen Harper, National Post Wed, October 26, 2005

"As my party’s finance critic, Monte Solberg, says, the success of income trusts represents a rare triumph for investors over the tax man. Let’s not be so naive as to assume that the Liberals will do the right thing to protect taxpayers. We’ll need to fight hard to keep what we have, and even harder to gain ground.

It’s time to stand up to Paul Martin and stop his attack on seniors and investors."
Stephen Harper, National Post, Wed., October 26, 2005

Sunstone said...

We really can't afford Harper!

Sunstone said...

* Liar Tubby - Not a Leader *

Dr Mike said...

"It was a commitment to protect the income of seniors."

"The Conservative campaign document said the party, if elected, would "stop the Liberal attack on retirement savings and preserve income trusts by not imposing any new taxes on them."

Um ... er ..... is it just me being dense??

So he was protecting the income of seniors by denying them one of their main sources of income.

He said above in the policy materials that he would not impose any new taxes on trusts.

Maybe I am just a bonehead but I cannot see where placing a 31.5% tax is the same as not taxing them.

Ain`t politics wonderful!!

It`s the only place in the world where a promise is not a promise because I say so.


Gobsmacked in Rodney--Dr Mike.

Robert Gibbs said...

Stevie's Tax Trick:

Have you been tricked by Stevie's tax on every income trust?

Robert Gibbs said...

Statements of pretense - part of the modus operandi of the filthy propaganda promulgated by the Führer Harper.

Richard said...

Tax leakage was B.S. to start with and will always be B.S.. The CONS need that arguement to justify their trust promise betrayal to a party faithfull who are too stupid to understand basic economics and how Canada's financial markets actually work. What a joke they are! Worse than the Mulroney Conservatives who screwed their political base over so badly Kim Campbell wound up with 2 seats. Remember that you Con Jerk Offs? As another former supporter I'm going to work the next election to make sure that A-Hole Harper does even worse.