TFSA a tax dodge for the rich.

[Donald G]

Saying I can't save is a sure way to insure that you never do save.

[Veovis]

Saying I can't save is a sure way to insure that you never do save.

And a great first step to then telling to government that you should be given some of the savings of those who did.

[Puddlejumper40]

http://www.castanet.net/edition/news-st ... htm#143109

Ottawa's recent move to raise the contribution ceiling on tax-free savings accounts offers little to benefit low- and middle-income Canadians, a new analysis of federal tax data has found.

The study, released Monday by the left-leaning Broadbent Institute, comes after the government nearly doubled the maximum annual TFSA contribution limit to $10,000 from $5,500. The Conservatives made good on an 2011 election promise with the April change, effective this year.

The report, however, said under the $5,500 yearly cap, there had already been a steep drop in the number of people who maxed out their TFSA contributions.

Maximization rates were higher for people in the upper income categories, says the study, written by Simon Fraser University economist Rhys Kesselman.

The research was released as politicians clash over what could become a pivotal ballot-box issue in the October election: how best to help Canadians save for the future.

The debate over TFSAs, in particular, has been central in the fight to woo voters in the so-called middle class.

Kesselman, whose past research helped build a foundation for the government's initial introduction of TFSAs six years ago, found in this latest report that 62 per cent of Canadians eligible for a TFSA had yet to open one by the end of 2013.

His number crunching of Canada Revenue Agency data also revealed that of all the people who qualified for TFSAs — but didn't necessarily have one — only about 6.7 per cent had maxed out in 2013.

For those who actually held a TFSA in 2013, only about 17 per cent had reached the contribution limit.

Kesselman said that among those eligible for TFSAs with annual incomes below $60,000, only five per cent hit the ceiling.

By comparison, the maximization rate was 31 per cent for those with incomes higher than $250,000.

"This study demonstrates that raising the TFSA limit to $10,000 will yield disproportionate benefits to the highest earners and wealth holders, and that this tilt will mount over time," he wrote.

The New Democrats and Liberals have promised to eliminate the Tories' TFSA expansion and bring the limit back to $5,500. Both parties charge that raising the maximum primarily benefits wealthier Canadians.

The Conservatives have defended their TFSA enhancement, saying everyone will benefit.

Finance Minister Joe Oliver has said people with yearly incomes of less than $80,000 accounted for more than 80 per cent of all TFSA holders in 2013.

In his report, Kesselman challenged such assertions.

"Contrary to the government's messaging, all the evidence indicates that the increase of the TFSA contribution limit to $10,000 will benefit only a very small proportion of Canadians," he wrote.

The TFSA expansion introduced by the Tories was watered down from its earlier pledge. The government decided against allowing the higher contribution ceiling to continue to rise with inflation, which will reduce its cost to federal coffers.

But even with that adjustment, the parliamentary budget watchdog has warned that expanding the limit will lead to a significant, long-term fiscal burden on the government.

The parliamentary budget office has also noted how TFSA expansion will help some Canadians more than others, stating in an April report that "high wealth and older households are projected to receive relatively larger benefits than lower net worth, younger counterparts."

[Donald G]

To Puddlejumper40 ...

So if the choices you make in life lead you to the point that you can not put aside the $10,000.00 retirement cushion then I should be banned from doing it because you chose not to ??

How much of my effort and savings do you think you should be entitled to ??

[Atomoa]

If you are not a 1%er you should be punished with higher user fees, less services and taxes.

There is only room for 1% of the population to be a 1%er, but you should still feel ashamed.

[Captain Awesome]

If you are not a 1%er you should be punished with higher user fees, less services and taxes.

Come on, taxes are not a bad thing.

[goatboy]

Minimum income to be in the top ...
10% of income earners $80,400*
1% of income earners $191,100*
0.1% of income earners $685,000**
0.01% of income earners $2.57 million**
*National Household Survey (2011), **Statistics Canada T1FF (2010)

While a good salary, the top 1% is not exorbitant and can be made by someone with or without education. Why hate the 1%?

[Puddlejumper40]

To Puddlejumper40 ...

So if the choices you make in life lead you to the point that you can not put aside the $10,000.00 retirement cushion then I should be banned from doing it because you chose not to ??

How much of my effort and savings do you think you should be entitled to ??

Sometimes it's no ones "choice" to not put that money away. It's hard to be banned from doing something if it doesn't come into effect.

Edited to add; bad wording choice. What I meant was if you are not used to making that contribution( like paying into it for the last twenty years and having it taken away) you have really not lost anything, "per say", if this gets reduced back to the original amount.

[Captain Awesome]

Minimum income to be in the top ...
10% of income earners $80,400*
1% of income earners $191,100*
0.1% of income earners $685,000**
0.01% of income earners $2.57 million**
*National Household Survey (2011), **Statistics Canada T1FF (2010)

If you make $15,000/year, you're in the top 1% of the world.

So, most of Canada are the world's 1%. Min. wage earners and welfare bums are the members of the world's elite. Yet we whine and moan like we're the poor cousins.

Which just proves that people are never happy and will always find something to be unhappy about.

[Donald G]

To puddlejumper ...

I note the word "IF" in your comment. That usually identifies an opinion that may or may not have merit "IF" the true facts were known.

[LANDM]

Actually, in a general sense, IF is used in a strictly conditional statement, not how you described it. It is much more precise than you indicate.