Tuesday, April 7, 2009

Would someone at the Globe like to take issue with this? The publisher perchance?

RECOMMENDATION 1 of Public Hearings on Income Trusts:

It is imperative that a democratic government be as transparent as possible when levying a new tax so that it can be held to account by its citizens. The Committee, therefore, recommends that the federal government release the data and methodology it used to estimate the amount of federal tax revenue loss caused by the income trust sector.

This is what the Finance Committee called upon the minority Harpler government to do, Why has it not happened?????

This should concern all truth loving freedom loving democracy loving Canadians. Anyone who says/argues otherwise, is none of the above:

Prove the case or drop the tax, as Diane Francis called for many many months ago.

Who at the Globe and Mail would like to take issue with that? Margaret Wente? Eric Reguly? Derek Deloet? Andy Willis?

Or maybe Philip Crawley, the Publisher, who refused to publish my Op Ed back in December 2006, after many, many people asked him to, including the President of Harper’s old haunt, the NCC and a group representing 20% of Canada’s oil and gas production and four investment mangers who manage money on behalf of 800,000 income trust investors. This Op Ed:

Mr. Flaherty’s Sleight of Hand

Mr. Flaherty is not without his creative side. Creative accounting that is.

During his short time in office, our Finance Minister has had the opportunity to demonstrate his skills at dealing with two issues that profoundly touch on Canadians saving for retirement. The first involves the Canada Pension Plan and the other involves income trusts. Because 70% of Canadians are not members of a defined benefits pension plan, these issues will affect virtually all Canadians at some point in their lives.

With much fanfare, Mr. Flaherty recently announced that the Conservative government’s fiscal plan would see the federal debt paid off by 2021. What didn’t receive quite the same level of transparency, was that he was using the assets of the Canada Pension Plan to do so. Mr. Flaherty would probably argue that this is no different than using your RRSP to pay off your mortgage. Wrong Mr. Flaherty, this is a case of using my RRSP to pay off my neighbour’s mortgage. This is nothing more than an accounting sleight of hand

As the second act of his performance, Mr. Flaherty has again made liberal use of his accounting creativity to effectively kill an important retirement savings investment choice, namely income trusts, in the false belief that they cause tax leakage. Mr. Flaherty’s so called Tax Fairness Plan is ostensibly intended to “ensure that taxes are not unfairly shifted onto Canadian tax payers”. If there is no tax leakage, then there would be no shifting. If there is no shifting, then there should be no need for “fairness” measures. What Mr. Flaherty has not revealed to Canadians or any Member of Parliament is that his assertion of tax leakage is simply another accounting sleight of hand.

Some 31% of Income Trusts are held in retirement accounts on which the government collects retirement taxes. In 2004, approximately $9 billion in retirement taxes were paid by seniors on $52 billion of retirement income.

In Mr. Flaherty’s good/bad analysis of the alleged tax leakage of income trusts versus companies, he has chosen to leave out 31% of the good, namely retirement taxes. If Mr. Flaherty were to simply acknowledge these retirement taxes paid by Canadian seniors, he would realize that income trusts are tax neutral. Not only does Mr. Flaherty not acknowledge retirement taxes, he uses that very analysis to devise policies that are regressive to Canadian seniors and the choices all Canadians have as they too make provision for retirement income. Sleight of hand, or circular injustice?

Mr. Flaherty’s creativity however has its limits. His approach to income trusts, apart from being misguided, has shown no creativity in mitigating the loss to Canadians’ hard earned savings. His approach is better described as blunt force trauma.

This is a moot point anyway, since all Canadians will at some point in their lives be vastly better off if Mr. Flaherty would simply admit his mistake and repudiate these unfounded measures.


1 comment:

Dr Mike said...

Hey Liberals , get with the program!!

That is what the opposition is there to do , hold the gov`t`s feet to the fire of scrutiny & force them to be accountable.

A minority will run roughshod over the majority only if the majority lets them.

Dr Mike.