Federal Surplus Grows

[Argus]

Because the military was starved of funding for the entire tenure of the Chretien regime, and because the Chretien and Martin governments commited us to a long, violent stint in Afghanistan.

The troops would have been home in February. Harper extended that mission to 2009 and beyond.

It is unlikely the Liberals would have refused to renew the mission. No matter what they say now.

[Michael Bluth]

It is unlikely the Liberals would have refused to renew the mission. No matter what they say now.

You are correct sir. However, they wouldn't have had to force it through Parliament the way the Conservatives had to.

Given that they would have had Conservative support for extending the mission.

[jdobbin]

In any case, the other major parties would have ended the breaks on income trusts and it is unlikely the seniors would have been any better off under a different regime.

Well, the evidence was they were better under the Liberals. When given the chance to change the laws themselves, they backed away. Partly in response to Harper who said it was bad for seniors.

So was Harper wrong then now or wrong now?

[jdobbin]

It is unlikely the Liberals would have refused to renew the mission. No matter what they say now.

I guess the only way we'll now if the the troops will be out of southern Afghanistan is by electing a Liberal government.

[Michael Bluth]

Well, the evidence was they were better under the Liberals. When given the chance to change the laws themselves, they backed away. Partly in response to Harper who said it was bad for seniors.

So was Harper wrong then now or wrong now?

Evidence? Do provide.

The situation changed. He was right both times given the information available to him.

[Renegade]

Well, the evidence was they were better under the Liberals.

You mean seniors were doing better with income trusts under the Liberals? How so?

When given the chance to change the laws themselves, they backed away. Partly in response to Harper who said it was bad for seniors.

I wasn't aware that the Liberals listened to anything Harper said, or followed his advice. Disappointing for a party not to be able to make its own decisons, and have to say "I listened to the other guy".

So was Harper wrong then now or wrong now?

I have no idea, and we will never know. Did Harper pervent a disaster by changing the law so that more companies didn't convert to income trusts, or did he deprive investors of a tax break for which they are entitled? Unless you have visonary capabilies to know what would have happened, it is an unanswerable question.

[Michael Bluth]

I have no idea, and we will never know. Did Harper pervent a disaster by changing the law so that more companies didn't convert to income trusts, or did he deprive investors of a tax break for which they are entitled? Unless you have visonary capabilies to know what would have happened, it is an unanswerable question.

The rush to conversions early in 2006 signalled that the situation had changed and the Government had to act.

The fact that dobbin isn't even factoring that into his "analysis" shows he is just here to attack and nothing else.

[jdobbin]

You mean seniors were doing better with income trusts under the Liberals? How so?

I wasn't aware that the Liberals listened to anything Harper said, or followed his advice. Disappointing for a party not to be able to make its own decisons, and have to say "I listened to the other guy".

I have no idea, and we will never know. Did Harper pervent a disaster by changing the law so that more companies didn't convert to income trusts, or did he deprive investors of a tax break for which they are entitled? Unless you have visonary capabilies to know what would have happened, it is an unanswerable question.

Seniors would be hurt by the income trust decision according to all of the critics on taxing income trusts. I'd say that seniors did better by the Liberal policy on trusts than the flip flop by the Tories, don't you?

As for listening to Harper, it was a minority government. I'd fully expect that Harper would have used the opportunity to bring down the government if he could have. The Liberals kept the policy as is.

I think that if Bell Canada and Telus had converted over to trusts, they'd probably not be in the takeover position they are in now. And given the surplus the government is running each year, I don't think we would have gone into deficit.

[Michael Bluth]

Seniors would be hurt by the income trust decision according to all of the critics on taxing income trusts. I'd say that seniors did better by the Liberal policy on trusts than the flip flop by the Tories, don't you?

Depends on the income level of the seniors.

Those at the lower levels of income are definitely better off under the Conservative's plan.

Do you honestly think the Liberals could have afforded to stay the path they were on?

[Jean_Poutine]

It is unlikely the Liberals would have refused to renew the mission. No matter what they say now.

I guess the only way we'll now if the the troops will be out of southern Afghanistan is by electing a Liberal government.

Like the Liberal government that sent them there?

[Riverwind]

Seniors would be hurt by the income trust decision according to all of the critics on taxing income trusts. I'd say that seniors did better by the Liberal policy on trusts than the flip flop by the Tories, don't you?

Trusts are now back up to what they were before the decision. The only seniors that lost money were the ones that sold in panic.

The policy needed to be changed. The Conservatives could have eliminated taxes on profits paid as dividends. However, this would have screwed another group of seniors that benefited from the dividend tax credit.

[Big Blue Machine]

More debt pay down.

[jdobbin]

Like the Liberal government that sent them there?

And actually had a deadline and exit strategy for them.

[Michael Bluth]

Like the Liberal government that sent them there?

And actually had a deadline and exit strategy for them.

Deadline? Yes.

Exit strategy? No.

Another distortion? You be the judge. Contrary evidence *could* be provided, but what are the odds.

[jdobbin]

Trusts are now back up to what they were before the decision. The only seniors that lost money were the ones that sold in panic.

The policy needed to be changed. The Conservatives could have eliminated taxes on profits paid as dividends. However, this would have screwed another group of seniors that benefited from the dividend tax credit.

For seniors depending on dividends monthly from their trusts, the only way to pay their bills was to sell. The market wiped out $20 to $40 billion in assets.

Trusts have recovered now because they are now vulnerable to takoevers. In 2011, income trusts are to disappear so even for seniors who still hold assets, they will have to find a way to either sell or weather the possible loss of value in their stock because it is now paying taxes.

If you are a senior, you went quite a few months with lower dividends and possibly a loss because you had to sell your assets to survive. The split income might help some but not everyone has an income to split with someone else.

Seniors believed the promise the Tories made in the election.

[jdobbin]

More debt pay down.

So you'd rather pay an extra $13 billion a year in taxes to pay down the debt?

[geoffrey]

Do you honestly think the Liberals could have afforded to stay the path they were on?

Yes, eliminating trusts cost a great deal of tax revenue. The government is poorer having eliminated income trusts. Oh well though, keep believing what they feed you. I've presented how many independant reports that call BS on the decision. I've yet to see any that are in favour.

That's because no good came of the choice.

It wasn't a tax loophole like the CPC wants you to believe, it was a tax deferral. From companies that can have some tax fun and mess with things a little legally, to people that essientally have to pay the tax on what they earn, deducted at souce really.

So we've moved it from the easy to police and collect individuals to companies that can legally avoid taxes forever essientially.

Whoever thought of the idea was very short sighted. And it has cost Canadians initally when the promise was broken, and it's going to continue to cost with people losing all their investment opportunities to private equity.

[jdobbin]

Yes, eliminating trusts cost a great deal of tax revenue. The government is poorer having eliminated income trusts. Oh well though, keep believing what they feed you. I've presented how many independant reports that call BS on the decision. I've yet to see any that are in favour.

That's because no good came of the choice.

It is probably contributing to the free for all on Canadians companies right now as well.

[Riverwind]

For seniors depending on dividends monthly from their trusts, the only way to pay their bills was to sell. The market wiped out $20 to $40 billion in assets.

A bogus argument. The decision had zero effect on the income from trusts in the short term. There is no way any senior would have been forced to sell to pay bills. If they lost money it was because they panicked and made a bad investment decision - hardly the fault of the government.

Trusts have recovered now because they are now vulnerable to takoevers.

All Canadian companies are vulnerable to take overs now because there is too much money chasing too few assets that are actually available for sale. We have a government who seems to think that making a quick buck in the stock market is more important than the long term strategic interest of the country. It makes me sick to read a story about how Alcan can't take over Algoma because US law prohibits it. The problem with take overs would not be solved by letting every company convert to an income trust. It may have delayed some takeovers but it definately would not have stopped them.

Seniors believed the promise the Tories made in the election.

Then they had bad investment advisors. The writing was on the wall for anyone that cared. The rules would had to change and income trust unit holders would likely lost one way or another.

[jdobbin]

A bogus argument. The decision had zero effect on the income from trusts in the short term. There is no way any senior would have been forced to sell to pay bills. If they lost money it was because they panicked and made a bad investment decision - hardly the fault of the government.

All Canadian companies are vulnerable to take overs now because there is too much money chasing too few assets that are actually available for sale. We have a government who seems to think that making a quick buck in the stock market is more important than the long term strategic interest of the country. It makes me sick to read a story about how Alcan can't take over Algoma because US law prohibits it. The problem with take overs would not be solved by letting every company convert to an income trust. It may have delayed some takeovers but it definately would not have stopped them.

Then they had bad investment advisors. The writing was on the wall for anyone that cared. The rules would had to change and income trust unit holders would likely lost one way or another.

You obviously haven't been reading about seniors who actually did have to sell because of the decrease in dividends.

Alcan cannot even takeover Alcoa because Pennsylvania law makes it difficult.

In any event, read the National Post and the Globe and Mail. They have spoken to make analysts and they agree that the takeovers for income trusts is way ahead of that for other companies.

What writing on the wall are you referring to? The Tories and Liberals both said they would not tax income trusts. Only one political party did. And now they are saying to seniors: tough.

[Michael Bluth]

A bogus argument. The decision had zero effect on the income from trusts in the short term. There is no way any senior would have been forced to sell to pay bills. If they lost money it was because they panicked and made a bad investment decision - hardly the fault of the government.

Exactly.

It was a foreseeable decision.

Like the old story goes. "If it sounds too good to be true..."

[Riverwind]

You obviously haven't been reading about seniors who actually did have to sell because of the decrease in dividends.

But I have been talking to my relatives who are heavily invested in income trusts. Any who claims that trust tax changes caused their income to decrease does not know what they are talking about. It is possible that some trusts had to reduce their dividends because their business was not doing well. It would not surprise me to hear that management blames the tax changes rather than themselves. Seniors in those trusts would have been screwed no matter what.

What writing on the wall are you referring to? The Tories and Liberals both said they would not tax income trusts. Only one political party did. And now they are saying to seniors: tough.

I learned long ago that politicians do what they have to - not what they promise. Corporations and income trusts had to be put on the same tax footing. This meant that either corporate taxes had to go or trusts had to be taxed. Getting rid of all corporate tax is a political impossibility which meant that trusts were going to taxed - no matter what the Conservatives or Liberals promised.

[jdobbin]

But I have been talking to my relatives who are heavily invested in income trusts. Any who claims that trust tax changes caused their income to decrease does not know what they are talking about. It is possible that some trusts had to reduce their dividends because their business was not doing well. It would not surprise me to hear that management blames the tax changes rather than themselves. Seniors in those trusts would have been screwed no matter what.

I learned long ago that politicians do what they have to - not what they promise. Corporations and income trusts had to be put on the same tax footing. This meant that either corporate taxes had to go or trusts had to be taxed. Getting rid of all corporate tax is a political impossibility which meant that trusts were going to taxed - no matter what the Conservatives or Liberals promised.

I think you can spin any way you want but the fact is that the decision caught people off guard. There was no writing on the wall. The Tories flip flopped on the issue and people were hurt by it no matter what your relatives say.