A plug for tax leak

A plug for tax leak
Barry Critchley,
Financial Post
February 13, 2010

The results of a poll asking Canadians about the Marshall Plan were released and almost 80% want it included in the coming federal budget. The Marshall Plan has been around for about two months, is positioned between an RRSP and a TFSA, is designed to deal with the after-effects of Ottawa's decision to start taxing income trusts next year and will ensure Ottawa does collect taxes from the vehicle of choice for many Canadians, particularly the 75% of Canadians who don't have a pension.

The respondents are angry and are looking for answers -- plus a way to protect their savings -- as to what they view as Ottawa's broken promise not to tax income trusts, a decision made because of so-called tax leakage. What happened, of course, is that because of a number of takeovers, Ottawa has now suffered real tax leakage.

The release said that "the Marshall Plan has been designed to deal with Finance Minister Jim Flaherty's income trust policy fiasco that has caused three times as much tax leakage than was alleged to have existed in the first place, caused by the 51 takeovers of vulnerable income trusts by foreigners, state-owned enterprises and other non-taxable entities causing the permanent loss of $1.5-billion in annual tax revenue to Ottawa."

Judging by the reaction to a recent column on the Marshall Plan, the poll results are no great surprise. That column elicited more response than virtually everything that has appeared in this space. A website, Mashallplan.ca,explains the workings. ---