Wednesday, January 04, 2006

Untrustworthy

The Tyee's Matt Price covers the neglected reality about the income trust fiasco:
(T)he bigger scandal than alleged insider trading is that income trusts represent a brazen effort to rid Canada of corporate taxes with some accounting magic that even the Bush administration has disallowed in the USA...

(T)he bigger story here is...that the income trust boom represents a wholesale transfer of the Canadian tax burden away from capital and onto labour.

Anyone with money to invest - the rich, the retired - will benefit, but those who work for a living will shoulder an ever increasing share of paying for our public services.

This is a fundamental transformation of Canadian society taking place without the benefit of public dialogue.
I made the same point when Goodale announced his decision, though aside from one article cited by Price I'm not sure the mainstream media ever paid much attention to the position. As I said then:
(Goodale)'s decision is only a recipe for more loopholes - and more consequential tax cuts - down the road, rather than a system that creates incentives to play by the existing rules. And that means a comparatively greater share of taxes for those Canadians who don't have sufficient resources to develop the new loopholes.
It's indeed stunning that the Libs' bungling of the wider issue hasn't surfaced yet during the campaign, and Price rightly notes that even the NDP has dropped the ball in challenging Goodale's decision in substance as well as in form. Presumably that avoidance has been out of fear of losing votes among those whose pension plans have invested in income trusts. But even if it is too late to change the income-trust system now, there still seems to be a promising issue available for the taking.

Surely there's plenty of room both to cast blame on the party which failed to address the issue before it was too late, and to promise to ensure that future policy decisions are made before new loopholes manage to distort Canada's tax system. And I'd hate not only to see the NDP miss that opportunity to make those arguments, but also to see Goodale's stealth corporate tax cut pass forgotten into the history books.

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