Huh?????? Canada ended the royalty trusts because banks and others were going that direction and the tax laws for trusts there were different. MLPs ferer taxes but do not avoid them. In many situations a MLP owner will pay more taxes on a sale that from an ordinary stock becuase the recapture of depreciation is at ordinary income rates! Little to be gained in tax revenue and thousands of tax dollars to be lost from reduced enery production and worker taxes. There is no real tax break only the opportunity to pay lots of dollars when you sell.
Oh - You can avoid paying those deferred taxes if you are willing to die! Anyone out there willing to do that?
MLPs are private companies who fund and provide the veins and arteries of the country without tax money or subsidy. For this they get a preferential tax treatment, which trickles down to the unitholders.
If the tax structure were disturbed, invstment would severly diminish resulting in less infrstructure built which would ultimately cause a blockage (restriction) to the economy at large. Think heart attack, less blood (oil) = oxygen deprivation to vital organ. You get my analogy.
I don't believe this administration or any sane one would take those risks for a limited tax revenue benefit and a potential negative revenue scenario. The potential consequences are far to great.
While I wish they will continue the tax breaks for MLPs, I do not call it life blood, every industry and even TV evangelist want tax breaks, the trouble is that when one industry gets a break another has to carry its load! So who should bear the burden? Housing-Realtors and bankers can claim that will destroy jobs. Agriculture? will kill family farms. Drugs and healthcare- you get the picture. The ones I dislike the most is Carried interest and so called Faith / religious institutions.
"Canada is the model- eliminated the mlpl structure" after an initial, hard sell off the units all rallied like crazy because MLPs do not generate very much taxable income and all investors could buy the units after the tax advantaged status disappeared: pension funds and tax exempt organizations were allowed to invest for the first time.