February 26, 2010
Prof. Laurence D. Booth (Booth@rotman.utoronto.ca)
J. L. Rotman School of Management
University of Toronto
105 St. George Street
Canada M5S 3E6
You, Don Francis and myself had occasion to be interviewed by Havard Gould of the CBC for a segment on The National that aired this evening that dealt with the matter of the government’s taxation of income trusts. This policy was based on the government’s allegation that “income trusts cause tax leakage”.
On the CBC segment, you reaffirmed the government’s allegation by stating “the whole of the corporate income tax base was possibly at risk, or at least a significant part of it was at risk.”
Please clarify what you mean by “at risk”. At risk of what? The insinuation you are making on national television is that fewer taxes were going to be collected by Ottawa as a result of conversion of corporations to income trusts, such as BCE and Telus.
What is your proof for making such statements, as the only proof offered by the government to back it’s claims are 18 pages of blacked out documents? These documents have been blacked out for the sole purpose of hiding the fact that the government’s tax leakage analysis is grossly flawed, a fact that I was made aware of by Dennis Bruce of HLB Decision Economics on November 1, 2006 by way of his authoritative publication on this matter entitled “The tax revenue implication of income trusts”.
Dennis Bruce’s revelation about this gross error in the government’s analysis about tax leakage was reaffirmed to me in an email from your former colleague Jack Mintz, who wrote to me on November 26, 2006 stating:
“I do want to point out that there is a serious flaw in some analyses especially on the taxation of pension and RRSP accounts. Finance was not right to treat the impact as zero.”
Quite apart from Jack Mintz and Dennis Bruce, we have the authoritative findings of those like Professor Stanbury of UBC and groups like PricewaterhouseCoopers, RBC Capital Markets,. BMO Capital Markets, CIBC World Markets and others, who refute completely the government’s claims of tax leakage, however your comments indicate that you are supportive of the government’s claims of tax leakage. If so, please provide your proof of same and the academic justification for the claims you made on tonight’s CBC broadcast.
Thank you very much.
(Volunteer) President and CEO
Canadian Association of Income Trust Investors/Taxpayers
647 505-2224 (cell)
Cc Havard Gould, CBC
Esther Enkin, CBC
Gordon Tait, BMO
Dirk Lever, RBC
Ross Sinclair, PwC
Saturday, February 27, 2010
Posted by Fillibluster at 12:38 AM