I've said in the past that when Stephen Harper does something I can support, I'll acknowledge it. Yesterday, they took away the tax exemption for "Income Trust" companies.
I've been watching income trusts for a while, but I've not fully understood just what they are from an investment standpoint, so I've chosen to stay away from them. (Something felt intuitively "wrong" about the whole concept) Sometime last summer I learned that the income trust structure allowed a corporation to essentially download its tax burden onto the individual investors.
So, when Finance Minister Flaherty announced yesterday that the loophole that excused these companies from paying taxes was being closed, I was quite happy. One of my big criticisms of the Chretien and Martin governments was that the tax regime had disproportionately downloaded the tax burden on to the backs of middle income Canadians, and it was my becoming my belief that "Income Trust" structures were merely another aspect of that same downloading.
So, for once, the CPoC government has done something that I believe is an appropriate policy direction. {and perhaps, judging from the weather this week, hell has frozen over...}
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1 comment:
I agree.
As for individuals who have lost a lot of money, from what I know about investing (and that is very little), these income trusts should be only a minor part of your portfolio. So, someone losing 15,000 dollars with this income trust "scandal" is likely pretty rich. Therefore, technically, this income trust "dip" will not affect their future, unless they were dumb enough to invest it all that way. I fail to garner sympathy for the very rich. For me, a regular tax-paying citizen who lives just above the poverty line on a good day (yes, graduate school was a lifestyle choice and I accept the consequences), it rots me to see big banks and the like report billions of dollars in profit when my savings account has about 200 dollars in it (and I am taxed 2000 dollars annually). Basically, this income trust won't be hurting the "average" Canadian I don't think.
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