Monday, May 4, 2009

Is Jack Layton leader enough to speak Truth to Power, as in Power Corporation?

Like virtually all Canadians, Jack Layton was lied to by Stephen Harper about “tax leakage” from income trusts.

Others like me, found the tax leakage argument to be a lie based upon making one phone call to a former colleague on Bay Street and asking the question “whatever became of that tax leakage analysis that was commissioned during the Goodale round? Was it ever published? What did it show? Two hours later I had received and read the study by HLB Decision Economics entitled Tax Revenue Implications of Income Trusts. and I knew that tax leakage was a fraud. As a member of the Knowledge Society, I refuse to be lied to and misrepresented to by my government. Any government.

Tax leakage was the essential lie that was required to sell this policy to well intentioned people like Jack Layton at the behest of self interested groups like Power Corporation.

Absent the existence of tax leakage, the income trust tax is antithetical to everything the NDP Party and Jack Layton stand for including, protecting Canadians’ retirement assets and dignity for seniors as well a protecting Canada’s economic sovereinty fron foreign takeovers and preserving Canada’s social security system, which relies on taxes from corporate earnings, which are taxed at 6.2% under the corporate model and 38% under the income trust model, give or take.

I was not at all surprised to read in the Globe’s account of November 2, 2006 that Power Corporation was identified as a major lobbyist against income trusts and lobbying for the raiding of seniors nest eggs. Jack Layton will be interested to know this was an exercise in “Mile High” lobbying as it took place aboard the Power Corporation’s private jet, and read:

“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.”

This came as no surprised to me since I have spent 25 years in the Canadian capital markets serving the needs of people like Paul Desmarais Jr. of Power Corporation and it was in my role as Executive Managing Director and Head of Equity Capital Markets at BMO, that I learned following a major pitch to Power Corporation on how income trusts could be used to their advantage that, according to Paul Gratton, CEO of Power Financial at the time, that “Income trusts are bad for Canada”. That was the sum total of the formal feedback from that major presentation.

This self serving comment of Robert Gratton’s so reminds me of the expression from the sixties of “What’s good for General Motors is good for the United States”. Without belaboring the point, look where that attitude on the part of large corporations got the United States......not to mention General Motors itself.

It would take in depth knowledge of the Canadian capital markets for politicians, Liberal, NDP, Bloc or otherwise to understand just how self serving and self interested such a comment by Power Corporation truly is. Knowledge that few if any of them possess. However this is not knowledge that these politicians need to make a policy judgment on the income trust tax, since they need only approach the issue in a logical sequence, before proceeding to the next step in the decision making process. The very first step off that process involves speaking Truth to Power: Does tax leakage exist, or is it some grande ruse and conspiracy theory for Power Corporation et al, to get a Canada that is more beholding to them and their life insurance wares than would otherwise be the case if natural selection were allowed to occur and the Canadian capital markets be a survival of the species as opposed to a perpetuation of the status quo via blatant policy falsehoods>

Therefore, Jack Layton can apply to become the Prime Minister of the 2.5 million income trusts investors and the 33 tax paying Canadians, all of whom suffer under this Power Corp bespoke tax policy, and speak Truth to Power on Harper’s income trust fraud. The Liberals are presently leaving that “playing field” completely to the NDP and/or the Bloc and/or the Green Party to occupy

Who amongst you are Leader enough to speak Truth to Power Corp?


Kephalos said...

There is a huge need for Canadians to save more for retirement. If you do not work for government or a big corporation and/or have a union, you're probably not going to save enough for retirement.

The sad thing is that in the New Age of Harder Canada 50% of Canadians will retire with little or no savings. Some will sell their homes for 40 cents on the dollar. Many seniors will live in elder poverty.

Does any major political brand care about this problem? I don't think so.

Dr Mike said...

Why is it that Elizabeth May is the only leader to "get it".

Is it possible that her list of those she is beholding to is a lot shorter than the lists of the rest.

Dr Mike