Stephan Harper put the stamp of approval on income trusts and many retired Canadians bought trusts when he became Prime Minister because of that seal of approval.

What Harper did makes no sense at all. There is no provable tax leakage and only fools believe that BS. Canadas books in fact show zero tax leakage but rather MORE tax was collected from unitholders.

It was all ascam to take retired Canadians money and give it to private equity groups – which is exactly what has happened.

I will never vote for the Conservatives again as long as I live no matter who is in the party. I’d vote for the green party before I’d touch the Cons. That says it all.

The point is that if you had run your numbers just three months back, you would have shown a profit despite the income trust tax decision. Just as it is not correct to argue that there was no effect of the decision because you showed a profit then, it is incorrect to now say that the entire losses over a two year period are due to the tax.

On one hand, you are saying that income trust acquisitions by pension funds in 2007-08 have resulted in 100% loss of revenue and on the other, you are saying that pension funds holding income trusts resulted in no tax leakage in 2006. How is that possible? If there is a tax leakage now, surely there was the same tax leakage prior to the decision. And aren’t you ignoring that these trusts will start paying a tax in 2011 and the decision stopped the deluge of planned conversions that had a significant threat to current government revenue. Also, corporate taxes are now coming down that should benefit all investors.

“Even then, it isn’t an apples-to-apples comparison. Income trusts as a group are down 20% from as recently as June 2008. Your numbers would be completely different if you use those prices as of June 16, 2008.”

Do you have the data on all of the trusts for this time period or did you do a calculation that is a “meaningless” comparison of the prices of the trusts because you used a subset of the trusts (i.e. a trust index)?

Yes my numbers would be completely different for every day that the market has been open since October 31, 2006. And your point is…

BTW, any thoughts on the takeovers and the lost annual tax revenue on $1.4 billion in distributions?

That isn’t the issue here. The issue is the tax treatment of income trusts were much better than corporations when trusts are held in a tax-deferred account. And according to Finance, 39% were held in pension accounts, enjoying a much favorable treatment than corporations.

Is there a case that that should be changed? Yes, absolutely. Is it better to lower taxes on dividends? You bet. Or reduce corporate taxes? Yes, of course.

John: I notice that you’ve included REITs in your list, which are exempt from the income trust decision. Also, it is meaningless to compare prices of trusts between Oct. 31, 2006 and now. Why? Because a number of trusts have ROC distributions that should be accounted for. Even then, it isn’t an apples-to-apples comparison. Income trusts as a group are down 20% from as recently as June 2008. Your numbers would be completely different if you use those prices as of June 16, 2008.

“handsomely rewarded”?

At the close of business yesterday the remaining 192 trusts are down $31.375 billion from their close on October 31, 2006.

Please see my file on losses as of Sept. 22, 2008

http://www.4shared.com/account/file/64103503/25f140fb/Income_Trust_Losses_from_Oct_31_2006_as_of_Sep_22_2008.html

John
Investment Banking Jobs

Here’s some simple mathematics for retired seniors holding income trusts in their Registered Income Funds (RIF’s -the vehicle paying monthly income to retirees and the alternate to pension plans.). For the next four years seniors will continue to get a $1/unit distribution from ordinary trusts. In 2011, the $1/unit distribution will be reduced to less than 70 cents/unit after payment of government corporate taxes. Seniors then take the 70 cents as a payment from the RIF. For seniors, trust income was used in a diversified portfolio to increase the yield, and the trust payments are coming out of mature RIFs at the top marginal tax rate, 45% Canadian average. So governments get another 31 cents of the original $1/unit distribution. Wow, talk about government taxation productivity! Talk about corporations paying their fair share. Governments are to receive more than 60% of the original $1/unit distributed from income trusts under the new Conservative fair share tax plan of corporately taxing income trusts. But Teachers pension plan, Imperial oils pension plan, professional corporations are allowed to hold onto income generated in their business without corporate taxation. Moneys paid to pensioners and money paid to owners of professional services business’ , are taxed in the hands of the recipients just as the trusts were before the Halloween Masaacre imposed on trusts by the Conservatives . Energy Trusts were a large source of financing for the small oil producers in Alberta. Jobs are gone in the service and oil production business of Alberta as a result of the loss of this very efficient business model. Before you vote, talk about this matter with your tax consultant, your stock broker or even the invester relations department of an Oil/Gas income trust in Calgary.