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PrintStop the income trust bleeding: adopt the Marshall savings plan
Whether the PM and the finance minister put the MSP into the coming March 4, 2010 budget depends on their political savvy. Adopting the MSP could lance the large boil of justified anger caused by the 31.5 per cent tax on income trusts.
Due to the scale and scope of their activities, when governments make errors, the consequences can be devastating—even generational. The Harper government's 31.5 per cent tax on income trusts announced on Oct. 31, 2006 caused a permanent loss of $35-billion in investment value of Canadians' savings. This figure does not include the unintended consequences, the most notable of which is the ongoing takeovers risk facing the 220 targeted public trusts by foreigners, and on going private transactions by public sector pension plans, as their means to avoid the tax. The result was a significant loss of tax revenue for the federal and provincial governments. In summary terms, the income trust tax has been a public policy train wreck for the Harper government (see Stanbury, The Hill Times, Sept. 22, 2008).
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Stop the income trust bleeding: adopt the Marshall savings plan
Whether the PM and the finance minister put the MSP into the coming March 4, 2010 budget depends on their political savvy. Adopting the MSP could lance the large boil of justified anger caused by the 31.5 per cent tax on income trusts.
Due to the scale and scope of their activities, when governments make errors, the consequences can be devastating—even generational. The Harper government's 31.5 per cent tax on income trusts announced on Oct. 31, 2006 caused a permanent loss of $35-billion in investment value of Canadians' savings. This figure does not include the unintended consequences, the most notable of which is the ongoing takeovers risk facing the 220 targeted public trusts by foreigners, and on going private transactions by public sector pension plans, as their means to avoid the tax. The result was a significant loss of tax revenue for the federal and provincial governments. In summary terms, the income trust tax has been a public policy train wreck for the Harper government (see Stanbury, The Hill Times, Sept. 22, 2008).
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