Flaherty’s income trust tax carve-out for pension funds, insufficient to stem their massive losses.

How is it that income trusts cause tax leakage when held in an RRSP, but not when held in a pension fund? Otherwise why would Flaherty have allowed pension funds to own income trust and not pay the 31.5% tax?

Does that strike you as tax fairness? Of course not. Flaherty’s Tax Fairness Plan is actually a Tax Arbitrage Plan that Flaherty handed over to the pension funds so they could exploit on a predatory basis the income trusts held by the Average Joe and bolster their own under funded selves. What form of government sponsored highway robbery is that? The federal governments ripping off taxpayers to the sole advantage of the Provincial sponsored pension funds? Any wonder that all 10 provincial finance minister sent in letter of support for Flaherty’s idea of a tax fairness plan? On demand, as it were?

Meanwhile this rip off of income trusts investors by the provincial plans, all of whom exploited the tax arb handed to them by Flaherty, are reporting major losses. What other corrupt practices are going on within these funds vis-a-vis the Harper Government? Notice how vociferous these pension funds like Ontario Teachers were during the Goodale round and how totally passive and submissive and outright supportive they became during the Flaherty round? It’s called being “bought off” with a bespoke policy carve out.

The Liberals should be outraged, as they created the RRSP over 50 years ago with the sole policy intent of allowing the Average Joe to use an RRSP to replicate the benefits of those with pensions? That concept has been defiled by Flaherty. Where are the Liberals on this? In bed with the pension plans themselves?

Also, where is the Toronto Stock Exchange on this? Why would the TSX roll over in the face of a 31.5% tax that only applies to PUBLICLY LISTED income trusts and not those self-same trusts when held privately? Is the TSX actively trying to go out of business by losing listings and allowing a market that has represented 50% of new issue activity to die......based on the government’s demonstrable lie about tax leakage. It is all beginning to feel quite incestuous to me?

Quebec pension giant Caisse posts $39.8B loss (February 25, 2009)..... Caisse group to buy Legacy Hotels Income Fund for C$2.5 billion ( Jul 12, 2007)

OMERS books $8-billion 2008 investment loss (February 23, 2009) ....OMERS buys Teranet Income Fund for under $2 billion, cuts price (October 28, 2008)

Public Sector Pension Plan picks off Thunder Energy Trust for $4.00 per unit, even though it is exempt from new trust tax ( April 26th, 2007 )

Lots of other examples of the Tax Arbitrage Plan in action have occurred, that are too numerous to list.