Posted on 02/11/06
Adjustment significant, 'but it hasn't been complete,' strategist says
How much has the income trust tax benefit meant to the Canadian stock market? Yesterday's declines may not be the half of it.Between the tax benefit enjoyed by the trusts, and the froth generated in numerous other stocks that investors had hoped would convert to the business structure, the trust break represented as much as 5 per cent of the value built into the S&P/TSX composite index. The index fell 2.4 per cent yesterday after the federal government announced that it plans to tax the cash distributions of income trusts at a rate equivalent to the taxes on traditional corporate structures.
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