Investing & Financing: Income Trusts Blow Up

Way to go back on your campaign promises conservatives.......

This government campaigned on being honest with the electorate. Not surprising they reneged on an agreement, just one that was so philosophically close to their mantra (small government, low taxes).

Yes, there are economic arguments that say income trusts should be eliminated, and I agree with those. But to say that the government couldn''t forsee ever larger companies going the trust route is false. For the past 15 years more and more companies outside of real estate have been using this vehicle to avoid taxes. It was only a matter of time before one of the major corporations did the same. If the Conservatives really couldn't see this coming only 12 months ago based on clear, well known trends, then they are incompentent and should be thrown on out on that basis. On the other hand, they did know this would eventually happen and chose to lie to the public. Again, reason enough for dismissal.

Furthermore, first world governments typically don't go around changing taxation laws that affect such a broad swath of investors without first consultation. This will scare off foreign investment, since many foreigners have bought into income trusts for their yields (Forbes has been renowned for pumping up oil trusts in their magazine and newsletters). This will ultimately damage the investment worthiness of many companies, not just trusts.

At the end of the day it's going to be people who remember losing 10-20% of their trust portfolios on one day thanks to the government come next election. Too bad there's no real alternative to them...