| apr 18 2007 | | Jim Flatulence, the smell lingers. | Back on November 12th 2006 I commented on the stupid decision of our Finance Minister to change the tax status of Income Trusts. The reason he gave was tax leakage. Since then we had a probe that revealed insider trading prior to the news. That probe resulted in one civil servant being accused. Are we to presume everyone else got away with it, on the “no smoke without fire” truism?
In a single foolish act he slashed the value of these holdings, mostly held by widows and pensioners for the fixed income, reportedly to stop those American holders avoiding taxes.
Good job Jim! Well not quite. You see as predicted, other Americans rushed in to buy the assets that our clueless Finance Minister had dispatched to the bargain basement. In the last few months foreign investors have bought those really cheap income trusts. So far, and understand this is just the beginning, ten trusts have been sold. Canada will collect no taxes from them ever again. Zero. Ziltch. Nadda.
So let’s help Jim Flatulence out here. What is better, having a thriving trust market where you citizens can invest and receive fixed income but maybe some foreigners can avoid some tax? Or, slash your country’s pensioners’ savings by $25 billion and collect no tax. Wow, that’s a toughfy.
Think I’m being hard on Jimbo? Well, so far he has refused to disclose his figures on how much tax leakage was going on, on grounds of National Security, or some other bosh. So much for freedom of information. See, the thing is no one believes this was necessary in the first place but even if you could show the maths that led to the decision, the result has been catastrophic.
Let’s hope he doesn’t move to Health, or he would solve the country’s sick by closing the hospitals.
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