Monday, October 20, 2008

Question for Mark Carney and Jim Flaherty:

According to your flawed methodology, what will the tax leakage from OMERs’ purchase of Teranet be?

Teranet Income Trust is presently owned 38% by individuals in their RRSPs and by pension funds like Hospitals of Ontario Pension Plan (HOOPP). The remaining 62% is held by “taxable” investors.

According to Mark Carney’s grossly flawed methodology, this means the government collects zero taxes from Teranet’s distributions paid into RRSPs and pension funds like HOOPP. This flawed assumption is how Mark Carney MANUFACTURED his tax leakage claims, by ignoring 38% of the taxes collected from income trust investors by the government. This was Carney’s intellectually corrupt rationale for imposing a new SECOND tax at the rate of 31.5%, simply because the government (Mark Carney) ignored the first taxes that they are collecting (on a deferred basis) and which are the economic equivalent of taxes being paid as cash taxes today.

Now, in the irony of all ironies, Teranet is being acquired 100% by a pension fund, namely OMERs. By definition, using Carney’s flawed logic for his income trust tax, this will only make tax leakage much worse that it was before, since:

(1) The RRSP/Pension Fund ownership of Teranet will soon go from 38% to 100%, increasing tax leakage by 260%;

(2) Since Jim Flaherty was (to use his own words) a wimp, he carved out an exemption for pension funds from his draconian 31.5% tax, by the mere act of pension funds owning these income trusts “privately” instead of “publicly”. This is Flaherty’s idea of “leveling the playing field” and a “tax fairness plan”. PUHLEASE. Even the Toronto Star should have a problem with that twisted logic. Where is the media on this matter? Isn’t the media interested in good public policy and true tax fairness? Or is the media part of the problem and as intellectually corrupt as the politicians and the bureaucrats themselves?

1 comment:

Dr Mike said...

How in the devil did we ever end-up with such an incompetent boob like Flaherty in charge of our finances.

If he had a clue , it would be lonely.

Anybody worth their salt as a Finance Minister would see that these numbers don`t add up in terms of this whole thing being beneficial to the tax coffers.

Why is no-one other than us screaming bloody murder??

Dr Mike Popovich.