Saturday, March 6, 2010

Post mortem: Rewriting Flaherty's Ways and Means Motion to conform with its actual outcome


Flaherty’s Ways and Means Motion to introduce the double taxation of income from trusts in RRSPs, but not pensions funds was a sham see through exercise from the very outset, to those with any finance knowledge to speak of, and was more deserving of being called a Ways and Means Notion, rather than a Ways and Means Motion, so I thought it would be insightful to rewrite the original Notion in a way that conforms with actually transpired

Notice of Ways and Means Motion to Amend the Income Tax Act


That it is expedient to amend the Income Tax Act, in accordance with proposals announced by the Minister of Finance on October 31, 2006, to uphold the value of gross unfairness for Canadians by:

* unlevelling the playing field between RRSPs and pension funds by double taxing RRSPs but not pension funds, thereby creating a 31.5% tax arb that favours pension funds that can exploited in transactions like OMERs predatory purchase of Teranet Income Fund, a transaction solely motivated by the evasion of the 31.5% taxes by OMERs and triggering government induced losses in the hands of Teranet’s previous public investors who are forced to pay the 31.5% tax.

* ensuring that taxes are unfairly shifted onto the shoulders of Canadian taxpayers, especially Canadian families, arising from the loss of $1.5 billion in annual taxes from the 51 trust takeovers, with up to $6 billion more per year to come, unless stopped by measures such as the Marshall Savings Plan

* weakening Canada's social security system for pensioners and seniors by making more seniors reliant upon it and less funding available for it, in addition to imposing losses of $35 billion in their retirement savings and retirement nest eggs

* eliminating businesses from having choices that were previously available to them that were more consistent with economic growth and competitiveness, and

* bringing Canada's approach to the taxation of trusts and partnerships out of line with other jurisdictions like the US who have a $480 billion income trust market that goes by the name of MLPs, or Singapore who modeled their market after Canada’s enormously successful business income trust to attract much needed investment capital to the country, while at the same time providing a new investment vehicle perfectly suited to the country’s aging demographic

The original Ways and Means Notion read like this:

That it is expedient to amend the Income Tax Act, in accordance with proposals announced by the Minister of Finance on October 31, 2006, to uphold the value of fairness for Canadians by:

* levelling the playing field between trusts and partnerships and corporations,

* ensuring that taxes are not unfairly shifted onto the shoulders of Canadian taxpayers, especially Canadian families,

* strengthening Canada's social security system for pensioners and seniors,

* helping corporations make choices that are consistent with economic growth and competitiveness, and

* bringing Canada's approach to the taxation of trusts and partnerships back in line with other jurisdictions,

6 comments:

Dr Mike said...

Hey Jim , what`s in your wallet?

I hope $9000 to pay for that exorbitant plane ride you took to come in to yak with us in London yesterday in our local Tim Horton`s.

Dr Mike Popovich

PS--Hey Jim , next time you are in town , maybe you could explain to me why pension funds got a tax holiday with the trust tax but I did not.

CanadianSense said...

Place a call at LPOC and demand those ten seasonal flu challenged Liberals bring the amendments you require.

Dr Mike said...

"A man who is angry on the right grounds, against the right persons, in the right manner, at the right moment, and for the right length of time deserves great praise." - Aristotle

Right on the Money--I have believed this my whole life.

Enter Jim Flaherty & the Tax Fairness Plan.

Exit me as a life-long Conservative supporter (37 years).

Dr Mike Popovich ~~~~ Rodney Ont

PS---Dune eh--loved it.

You ever read "The Stand" By Stephen King??

Number 1 & 2 in on my list.

CanadianSense said...

You want to be Politicians are different?

I am much too cyncial and believe both parties were going to make those changes.

The voters passed judgement in 2008 on the record and decisions by the CPC an rewarded them.

In 2009 they sent two more to Ottawa and zero liberals.

Perspective?

You allege nothing has been done regarding taxes for senior still?

Why are the "seniors" 10 points in favour of the CPC policies?

Why are the Liberals refusing to include your ideas for as a condition to support the budget?

Dr Mike said...

Income trust investors have no party , they have no constituency.

We have been taken to the cleaners by all parties as they are all beholding to big business interests.

I have personally talked to members of all the major parties & very few even know what an income trust is---very few understand the concept of double taxation within RRSPs & why it becomes a major issue as trusts within RRSPs now convert to corporate dividend payers..

Very few understand the necessity for an income stream as you move into retirement.

These guys are all tuned-out to anything that doesn`t get them votes.

This issue just underscores the loss of democracy in this country where blacked-out pages are now the norm.

It saddens me to see what this country has become & that is the fault of all parties & of the citizens who allow this to occur.

So , pissed-off I will remain until the whole system has been revamped to return control to the people.

Dr Mike Popovich

CAITI said...

Re: "A man/woman who is angry on the right grounds, against the right persons, in the right manner, at the right moment, and for the right length of time deserves great praise." - Aristotle

Right on Aristotle! These Greek Philosophers would know, as they helped invent democracy.

As for "the right length of time", might I add...."as long as it takes"

I don’t think however democracy turned out quite like Aristotle envisaged:

“In a democracy the poor will have more power than the rich, because there are more of them, and the will of the majority is supreme.”

Aristotle quotes (Ancient Greek Philosopher, Scientist and Physician, 384 BC-322 BC)


Brent Fullard