Question for John Manley from a Liberal delegate

Mr. Manley:

I understand that you are considering running for leadership of the Liberal Party. If so, I have one topic to raise with you.

What is your position on income trusts? In the past you have declared your support for Stephen Harper’s income trust tax on the basis that “I don't think you can run an economy where you have different kinds of business vehicles that are taxed totally differently." (Globe and Mail, September 4, 2007)

My questions on this topic are as follows:

(1) Is this still your position?

(2) If the answer to (1) is yes, then will it be your intention as Liberal Leader to begin taxing all law firms (like McCarthy Tetrault, your current employer) at the rate of 31.5% in order that “I don't think you can run an economy where you have different kinds of business vehicles that are taxed totally differently."? If not, why not? Perhaps you believe that law firms should be exempted, as are REITs, on the basis that law firms are “passive businesses”?

(3) Do you believe it is fair that different types of retirement investors be taxed differently, such that income trusts held in RRSPs are taxed at the rate of 31.5%, whereas those same income trusts held privately by pension funds are not? For example, Teranet is being acquired by OMERs. OMERs will be exempt from the 31.5% tax, whereas Teranet’s existing owners will not be. How will the purchase of Teranet by OMERs address the issue of alleged tax leakage from income trusts? Do you consider this to be a fair and efficacious outcome, as the proposed purchase of Teranet by OMERs is not an isolated example?

(4) Are you aware that the Harper government’s argument of alleged tax leakage from income trusts is a contrived argument that is manufactured by excluding the taxes paid on the 38% of income trusts that are held in RRSPs? The act of ignoring the taxes paid by income trusts held in RRSPs has become the Harper government’s central rationale for introducing a new, second tax on RRSPs at the rate of 31.5%. Does this make any sense to you?

I look forward to your response, as I will only be supporting a leadership candidate who is interested in the truth behind far reaching tax policies, such as the highly destructive income trust policy that was based on a policy lie and whose outcome has proven it to be a disaster, from all possible vantage points.

Yours truly,

Brent Fullard
505 647-2224