| The federal government announced the Tax Fairness Plan (the "Plan") on October 31, 2006. Under the Plan, income trusts are taxed in much the same manner as corporations, thereby losing the flow-through tax advantages previously associated with this structure. In this thesis I argue that energy trusts should be able to retain these tax advantages associated with the income trust form. In Part II, I describe these tax advantages, with a focus on foreign investors and tax exempt entities. In Part III, I explain the operation of the Plan and describe the way in which it interferes with these tax advantages. In Part IV, I explain tax expenditures and canvass the arguments for and against retaining these tax advantages for energy trusts. In Part V, I conclude that it is good public policy to exempt energy trusts from the Plan and retain the tax advantages of the income trust structure. |
