Monday, November 06, 2006

Income Mistrust III

Lorne Gunter makes an excellent point about the Income Trust Issue. (Sorry it’s behind a subscription wall).

Essentially, Gunter makes the point that raising the tax on trusts was not the government’s only option.

“Equity could have been achieved,” writes Gunter, “by lowering the taxes on corporations rather than raising the taxes on trusts . . . rather than slashing billions from the value of trusts, it would have added billions to the value of corporations.”

Makes sense to me.

In fact, it made sense to Stephen Harper before he became Prime Minister.

Here’s what he wrote in a National Post op-ed on October 5, 2005, when the Liberals were thinking about taxing income trusts:

“The government claims that income trusts enjoy an unfair tax advantage over corporate dividends. If they believe this, then the answer is not to shut down a valuable investment vehicle, but to cut the double taxation of dividends. In short, level the playing field and let the market decide between income trusts and dividend-paying companies.”

Anyway, the Conservatives will now have to bear the consequences of their actions.

And among those consequences are blogs like this one.


Matt said...

The best, most concise assesment I've read so far of what the gov't should have done with income trusts.

When will you be leaving the NCC to run for office?

Anonymous said...

As much as I support tax cuts wherever possible--are you kidding? It would be political suicide and there would have to be large scale tax restructuring to prevent deficit problems from emerging for a number of years. Individuals pay all taxes eventually no matter what so don't cut your own throat politically.

Miles Lunn said...

I agree with anonymous. If enough corporations switched to income trusts, the government would have to make the revenue up somewhere. Now sure spending cuts is one option, but realistically that can only go so far without being turfed. I think taxing income trusts, while cutting corporate taxes for non-income trusts is the best solution. Corporate taxes should be lowered, but they should be the same for everyone.

Clinton P. Desveaux said...

Stephen Harper and his so-called "conservatives" have transformed themselves into a Brian Mulroney Jean Chretien style government. When one wants power at any cost, these sad things happen...

Anonymous said...

Not to put too fine an edge on this, but was Lorne Gunter the best pundit you could find?

Considering that the quote you used was taken two days after a column in which he agreed with the government's measures on income trusts.

To wit: "The Conservatives had no choice but to go back on their campaign promise."

Harper's not the only one backpedaling on previous statements.