Income Trust Blowback

Begins today. I guess these folks won't be voting for Harpers Conservatives.

Meanwhile Financial Post (the Financial Post!!!) exposes the self interested business lobby that is pro Income Trusts; the Canadian Association of Income Trust Investors (CAITI) pointing out that they are not 'really' investors;

Whether CAITI actually represents trust investors is debatable. One witness appearing tomorrow, independent consultant Dianne Urquhart, says the association is in reality sponsored by trust vendors and the law firms and accountants supporting them. They are trust "investors" only to the extent they invest in their own product.

And the FP to its credit points out, as I have here the concerns that Income Trusts were always a ponzi scheme, benefiting fund managers and owners more than investors.

Contrary to what the spin masters would have us believe, not all pensioners are opposed to the government's decision to tax trusts. The National Pensioners & Senior Citizens Federation, which speaks on Thursday, supports Flaherty's decision. Its 450 chapters and clubs represent a million seniors and pensioners, including the 300,000 members of the United Senior Citizens of Ontario.Even before the Halloween decision came down, the NPSCF was concerned about "income trusts being sold to seniors on the basis of cash yields that are inaccurate, inflated and misleading."

What the Liberals should have done and didn't and what the Conservatives promised not to do, but did, affected investors, sure, but only a small number of well off seniors. Canadian seniors who have been screwed by Income Trusts should remember the financial term used for these kinds of investment; high risk.

This is not the same kind of rip off seniors in Alberta faced under the Tories in Alberta in the eighties (during the last big boom) when Dial Mortgage Abacus-Cities and Principal Trust collapsed. Those were avoidable and had been backed by the Alberta Treasury Branch as well as the Government. Yet when they collapsed seniors were left holding the bag.

What keeps getting lost in all this brouhaha is that Flaherty is promising business another tax cut to make up for taxing income trusts. That's the real meaning behind his euphimistic "Tax Fairness". Nothing fair about it. Just another government handout to those who already have the upper hand.

See:

Income Trusts

Tax Avoidance



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