# TFSA 2016 Contribution Limit



## bariutt (Feb 2, 2013)

With the new Trudeau government come January 1st what will one be allowed to contribute into a TFSA?

I know that during the campaign Trudeau talked about reducing the limit to $5000 however is there anything in place at this time that prevents one from depositing the $10,000 limit introduced by the Conservatives.

THANKS - I SEE AN ANSWER TO MY QUESTION POSTED IN THE INVESTING SECTION


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## Eclectic12 (Oct 20, 2010)

Nothing "prevents" one from putting $10K into a TFSA, regardless of what TFSA contribution room one has available and what the annual yearly amount that is granted is legislated to be.

That is why there is an over-contribution penalty of either 1% of the over-contributed amount per month or should it be determined that this is something other than an honest mistake - 100% pg any gains can be taxed.


Should the Liberals update the annual limit granted back to around $5K as they say they will - then the question will be whether there is an over-contribution or not.


Note that it is well worth tracking over-contributions for oneself as some of the 2009 over-contributors received their notices from CRA of penalties being imposed as much much ten months after the over-contribution, guaranteeing there would be at least a 10% penalty (1% x ten months).


Cheers


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## CPA Candidate (Dec 15, 2013)

The reduction of the TFSA annual contribution limit is looking very likely to begin January 1st as the legislation should be tabled in the coming days.


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## carverman (Nov 8, 2010)

Eclectic12 said:


> Nothing "prevents" one from putting $10K into a TFSA, regardless of what TFSA contribution room one has available and what the annual yearly amount that is granted is legislated to be.
> 
> That is why there is an over-contribution penalty of either 1% of the over-contributed amount per month or should it be determined that this is something other than an honest mistake - 100% pg any gains can be taxed.
> 
> ...


If the Harper gov't approved it and it was accepted by CRA in 2015, I don't see that if one put in $10k into the TFSA before or on December 31st, that the $10K can be rescinded back to $5,000 or $5500 max, where it was, before the Harper gov't announced the new limit back last April. 

As far as what happens in 2016, that is a different story. IF the Trudeau gov't want to rescind it to $5500 or even $5000, there is nothing stopping them, as most people out there cannot take advantage of the extra contribution room..saving $10K per year for most families is a tough undertaking and if you have a mortgage, that money is better spent paying down the mortgage. 

Most TFSAs pay diddly squat in interest thes days. My bank PCF pays only 0.8% on my TFSA.


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## MrPCMan (May 3, 2012)

Heard recently in the news there is a lobby group out there trying to convince Trudeau to keep it at 10K. I think it is a good idea to have it at 10K, it doesn't mean everyone is forced to put 10K in, but for those who have it makes it nice to shelter it a bit from taxes. 

If you invest your money inside the TFSA (GIC's, Equities, Bonds, etc.) you have a better chance at getting more than 0.8%, but there is also a risk of losing it too...just my 2cents. Gone are the days that banks will give you decent interest on money anymore.


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## Eclectic12 (Oct 20, 2010)

carverman said:


> ... As far as what happens in 2016, that is a different story.


I did say "Should the Liberals update the annual limit granted back to around $5K as they say they will ... " which I thought made clear that like the OP, I was referring to the 2016 TFSA annual contribution room.


Regardless ... my main point was that making a $10K TFSA contribution won't be "prevented". The transfer will go through where if it is an over-contribution, those depending on CRA to notify them can build up penalties for months before being notified ... so buyer beware.

The closest I've seen to being "prevented" is the notice that "these $$$ will be treated as a TFSA contribution, it is up the holder to ensure there is available contribution room".




carverman said:


> ... IF the Trudeau gov't want to rescind it to $5500 or even $5000, ...


They say they are going to make this change so I'm not sure why people are looking for what appear to be loopholes to have a second year of the $10K number. (I seem to recall this as the second thread hoping the Liberals won't be able to make the change before 2017.




carverman said:


> ... Most TFSAs pay diddly squat in interest thes days. My bank PCF pays only 0.8% on my TFSA.


TFSAs that are savings type as it needs to be liquid then yes ... other TFSAs that hold other investments can vary.


That said, to an American - 0.8% sounds great compared with 0.05%. :biggrin:


Cheers


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## Eclectic12 (Oct 20, 2010)

MrPCMan said:


> Heard recently in the news there is a lobby group out there trying to convince Trudeau to keep it at 10K. I think it is a good idea to have it at 10K, it doesn't mean everyone is forced to put 10K in, but for those who have it makes it nice to shelter it a bit from taxes.


I doubt it will go anywhere ... this is an election promise that is easy to fulfill.




MrPCMan said:


> Gone are the days that banks will give you decent interest on money anymore.


True ... the question is whether Canada heads the same way as the US where a four year term gets one 0.35% compared with 0.80% with no locked in period.



Cheers


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## yupislyr (Nov 16, 2009)

The ways and means has been posted here: http://www.fin.gc.ca/drleg-apl/2015/nwmm-amvm-1215-l.pdf

It doesn't take away the 10k for 2015. For 2016 it reverts back to the original rules so that should put the 2016 limit at $5500.


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## gibor365 (Apr 1, 2011)

What about "income split"? Would we have it still for 2015 tax year?


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## none (Jan 15, 2013)

gibor said:


> What about "income split"? Would we have it still for 2015 tax year?


If TFSA is getting put down to 5.5K then income splitting will be gone too.


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## mrPPincer (Nov 21, 2011)

none said:


> If TFSA is getting put down to 5.5K then income splitting will be gone too.


^yupislyr just said TFSA is not getting put down for 2015


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## AltaRed (Jun 8, 2009)

Nor is famly income splitting. But both will be gone for 2016 - should know today/tomorrow


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## gibor365 (Apr 1, 2011)

AltaRed said:


> Nor is famly income splitting. But both will be gone for 2016 - should know today/tomorrow


i KNOW ABOUT 2016  , NOT SURE ABOUT 2015


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## andrewf (Mar 1, 2010)

I'm pretty sure they were clear they wouldn't retroactively change any of the tax rates/rules in place in 2015.


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## Davis (Nov 11, 2014)

I don't think they were clear, but it is exceedingly unlikely that they would go retroactive. Governments will lower taxes retroactively on occasion, but rarely raise taxes retroactively.


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## GreatLaker (Mar 23, 2014)

andrewf said:


> I'm pretty sure they were clear they wouldn't retroactively change any of the tax rates/rules in place in 2015.


Definitely correct for the TFSA. Back to the original way of inflation adjusting to the nearest $500.

The Ways and Means Motion says:


> 9. (1) The definition “TFSA dollar limit”
> in subsection 207.01(1) of the Act is amended
> by striking out “and” at the end of paragraph
> (b) and by replacing paragraph (c)
> ...


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## GoldStone (Mar 6, 2011)

yupislyr said:


> The ways and means has been posted here: http://www.fin.gc.ca/drleg-apl/2015/nwmm-amvm-1215-l.pdf


Two notes on this:

1. A technical briefing by Finance confirmed that taxing the rich won't cover the cost of the middle-class tax cut. Income tax changes will add $1.2 Billion to the budget deficit.

2. Bill Morneau pretty much confirmed that budget deficits would exceed $10 billion a year.

Both items break Liberal campaign promises.


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## GreatLaker (Mar 23, 2014)

GoldStone said:


> Both items break Liberal campaign promises.


[SARCASM]Yabbut the Cons left the Libs with a much worse fiscal situation than they owned up to. At least that's what Bill Morneau says.[/SARCASM]

Whoo-eee it's gonna be fun watching Trudeau, Morneau and LebLanc sparr off against Ambrose, Raitt and Clement!


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## P_I (Dec 2, 2011)

For those that might be interested, the Department of Finance news release has been used to update Tax-Free Savings Account - finiki, the Canadian financial wiki to reflect the new 2016 reality.


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## GoldStone (Mar 6, 2011)

GreatLaker said:


> [SARCASM]Yabbut the Cons left the Libs with a much worse fiscal situation than they owned up to. At least that's what Bill Morneau says.[/SARCASM]


I see that you are joking, but here's a serious response to Morneau.

Stephen Gordon writing in Maclean's:

*The Liberals' deficit claim doesn't add up*

Stephen Gordon is an economics professor at l'Université Laval in Quebec City.


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## newfoundlander61 (Feb 6, 2011)

"But as of Jan. 1, it’s back to the future for this popular savings vehicle, dubbed the Totally Fantastic Savings Account by Wealthy Barber David Chilton. It reverts to $5,500 a year. " Seen in the Star this evening.


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## carverman (Nov 8, 2010)

none said:


> If TFSA is getting put down to 5.5K then income splitting will be gone too.


Trudeau has said on occasion that they will be changing the income tax structure so that the rich pay more and the tax breaks will go to the middle and low income families.
Middle income is where any tax splitting may still be beneficial. I doubt that tax splitting is going to do anything for the low income families as they are struggling just to survive.



> The impact of the Liberal’s proposed tax changes on individual families will depend on specific financial circumstances.....
> Even higher-income families will benefit from the tax cut on middle incomes, while some lower-income families could lose in the decision to end income splitting,


What else is Trudeau planning to do:


> *Income taxes*: The Liberals’ promised to cut the tax rate on middle incomes to 20.5 per cent from 22 per cent, reducing tax rates by as much as $670 a year on earnings between $44,700 and $89,401.
> 
> *Income splitting*: *They would scrap income splitting* for families because they say it benefits only wealthy Canadians. The measure allowed couples to shift up to $50,000 in income from a high earner to their lower-earning spouse for a maximum tax savings of $2,000 a year.
> 
> ...


http://www.thestar.com/news/gta/2015/10/20/what-liberal-win-means-for-your-wallet.html


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## carverman (Nov 8, 2010)

newfoundlander61 said:


> "But as of Jan. 1, it’s back to the future for this popular savings vehicle, dubbed the Totally Fantastic Savings Account by Wealthy Barber David Chilton. It reverts to $5,500 a year. " Seen in the Star this evening.


In reality it was an election bribe by Harper to try and get more votes. Income splitting was another one.

The TFSA was introduced in 2009, with a maximum $5000 contribution yearly. It was increased to $5500 in 2013.

The $5,500 annual contribution limit was indexed to the Consumer Price Index (CPI), in $500 increments, in order to account for inflation.
That was the way it was initially setup.

However, the Harper gov't decided to raise it to $10,000 as part of their proposed election strategy in their tabled budget, that was* never passed into law*, because Harper called for an early election and dissolved parliament shortly after. Known as "the longest election campaign in Canadian history".
Since this tabled budget proposal was never passed , it makes it vulnerable for Trudeau to dismantle all the changes in Harpers last budget, or pick and choose which
ones he wants to eliminate or change easily. 



> “For 2015 and subsequent calendar years, t*he budget proposes to increase the TFSA annual contribution limit to $10,000*.
> The CRA will allow financial institutions and individuals to act upon the new change effective immediately – prior to it passing through Parliament and before receiving Royal Assent.”


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## Beaver101 (Nov 14, 2011)

carverman said:


> Trudeau has said on occasion that they will be changing the income tax structure so that the rich pay more and the tax breaks will go to the middle and low income families.
> *Middle income is where any tax splitting may still be beneficial. I doubt that tax splitting is going to do anything for the low income families as they are struggling just to survive.
> 
> *


 ... +1 and as if the tax freebie interest on the additional $4,500 (if low income families can save this much) is going to make a difference. How about actually cutting some lard from his fat henchman bureaucrats first?


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## P_I (Dec 2, 2011)

As the OP notes, there is a parallel discussion happening in the topic T F S A - JAN 2016.


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## 0xCC (Jan 5, 2012)

carverman said:


> However, the Harper gov't decided to raise it to $10,000 as part of their proposed election strategy in their tabled budget, that was* never passed into law*, because Harper called for an early election and dissolved parliament shortly after. Known as "the longest election campaign in Canadian history".


I'm pretty sure the budget received Royal Ascent (i.e. was passed into law).

http://www.fin.gc.ca/n15/15-062-eng.asp


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## heyjude (May 16, 2009)

0xCC said:


> I'm pretty sure the budget received Royal Ascent (i.e. was passed into law).
> 
> http://www.fin.gc.ca/n15/15-062-eng.asp


Correct. Royal Assent occurred in June and was not a big news item.


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## Eclectic12 (Oct 20, 2010)

carverman said:


> ... However, the Harper gov't decided to raise it to $10,000 as part of their proposed election strategy in their tabled budget, that was* never passed into law*, because Harper called for an early election and dissolved parliament shortly after. Known as "the longest election campaign in Canadian history".
> 
> Since this tabled budget proposal was never passed , it makes it vulnerable for Trudeau to dismantle all the changes in Harpers last budget, or pick and choose which
> ones he wants to eliminate or change easily.


Be that as it may ... since the Liberals say they are trying to be a gov't for works for everyone - I doubt they want to cause complaints so early in their term by clawing back the 2015 TFSA $10K.

Since there is no mention of them attempting to do so in the ways & means, I suspect they will keep the peace (so to speak) by leaving the 2015 $10K amount alone. Otherwise, they have deal with those who have used it who are also likely those who are contributing to the political party coffers.


Cheers


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## Spudd (Oct 11, 2011)

The ways and means actually specifically says the 2015 limit of 10k will remain. See post #16.


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## andrewf (Mar 1, 2010)

It would be a gigantic battle for very little upside. They would not use political capital on it.


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## scorpion_ca (Nov 3, 2014)

Fact sheet: 2016 Indexation adjustment for personal income tax and benefit amounts

http://www.cra-arc.gc.ca/nwsrm/fcts...-eng.html?utm_source=mediaroom&utm_medium=eml


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## carverman (Nov 8, 2010)

heyjude said:


> Correct. Royal Assent occurred in June and was not a big news item.


Found it in Part 1. (click on "read more"). It was passed into law, now Trudeau wants to change the law.



> (j) increases the annual contribution limit for tax-free savings accounts to $10,000;


https://openparliament.ca/bills/41-2/C-59/?page=2


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## HaroldCrump (Jun 10, 2009)

MrPCMan said:


> Heard recently in the news there is a lobby group out there trying to convince Trudeau to keep it at 10K. I think it is a good idea to have it at 10K, it doesn't mean everyone is forced to put 10K in, but for those who have it makes it nice to shelter it a bit from taxes.


You mean the group called Working Canadians?
I saw that personal finance commentator Jonathan Cheavreau recently endorsed that petition on his website.

IMHO, they are wasting their time.
It'll be a cold day in Hell before the Trudeau govt. would even care to read the petition, let alone act on it.

Beheading the TFSA was one of the core tenets of their election campaign, along with all the other Harper-era tax reforms.


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## My Own Advisor (Sep 24, 2012)

"Beheading the TFSA was one of the core tenets of their election campaign, along with all the other Harper-era tax reforms."

Correct.

Time to move on and max it out, albeit easier to do so, and use any extra money later next year to kill the mortgage more. That's our plan.


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## HaroldCrump (Jun 10, 2009)

My Own Advisor said:


> kill the mortgage more. That's our plan.


Why?
Negative rates are coming, haven't you heard.
The _bank_ will be paying *you* to have a mortgage soon...


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## My Own Advisor (Sep 24, 2012)

@HC,

I've_ heard_ that might be our new monetary policy 

Well, I don't like debt and I figure with a fat mortgage I should try and reduce it. Maybe I will keep a bit so I can get paid. 
http://www.cbc.ca/news/business/negative-interest-rates-economy-deposit-1.3356370

I recall some European country has negative rates?
http://www.wsj.com/articles/less-than-zero-living-with-negative-rates-1449621094


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## peterk (May 16, 2010)

So are the new income tax brackets taking effect Jan 1? Can I expect my first 2016 paycheque to have $26 less in Fed tax taken from it?

Thanks Justin!

As the NDP has pointed out, I'm surprised they decided to decrease the middle tax bracket instead of the lower one. Those making less than $45K don't get anything. Meanwhile people like myself in the much richer 90-200k income range get the full $679 tax break. Weird.

Ah well, I'll take it. Still never gonna vote for the guy...


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## heyjude (May 16, 2009)

My Own Advisor said:


> Time to move on and max it out, albeit easier to do so, and use any extra money later next year to kill the mortgage more. That's our plan.





HaroldCrump said:


> Why?
> Negative rates are coming, haven't you heard.
> The _bank_ will be paying *you* to have a mortgage soon...


Why? Because if you currently have a legacy mortgage at, say, 4%, paying down principal gives you a guaranteed return of 4%. Just try getting that anywhere else! Besides, when your (now lower) mortgage comes up for renewal (at lower rates) you will be that much further ahead.


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## HaroldCrump (Jun 10, 2009)

My Own Advisor said:


> @HC,
> 
> I've_ heard_ that might be our new monetary policy





heyjude said:


> Why? Because if you currently have a legacy mortgage at, say, 4%, paying down principal gives you a guaranteed return of 4%. Just try getting that anywhere else! Besides, when your (now lower) mortgage comes up for renewal (at lower rates) you will be that much further ahead.


My comment was sarcasm, sorry if it wasn't clear.

Negative interest rates will not be passed down to consumers via mortgages.
Even in European countries that have negative 2 & 5 yr bond yields, mortgages are not actually negative.

This is known as _Interest Rate Apartheid_ and _financial repression_.


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## Davis (Nov 11, 2014)

peterk said:


> So are the new income tax brackets taking effect Jan 1? Can I expect my first 2016 paycheque to have $26 less in Fed tax taken from it?


It depends on whether your employer updates their withholding tables or not. That's out of CRA's control.


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## 0xCC (Jan 5, 2012)

It also depends if you maxed out the EI and CPP contributions for this year. If you did, those will get added back on your first paycheque of the year and I have a feeling those will more than account for the $26 less Justin want to take.


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## peterk (May 16, 2010)

0xCC said:


> It also depends if you maxed out the EI and CPP contributions for this year. If you did, those will get added back on your first paycheque of the year and I have a feeling those will more than account for the $26 less Justin want to take.


Yes of course. But every little bit helps. Should have the CPP/EI paid up by June.


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## peterk (May 16, 2010)

Davis said:


> It depends on whether your employer updates their withholding tables or not. That's out of CRA's control.


Sure thing. I'm sure they will. I just wasn't sure if it actually was intended to take effect Jan first by the CRA/Government.


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## CPA Candidate (Dec 15, 2013)

peterk said:


> So are the new income tax brackets taking effect Jan 1? Can I expect my first 2016 paycheque to have $26 less in Fed tax taken from it?
> 
> Thanks Justin!
> 
> As the NDP has pointed out, I'm surprised they decided to decrease the middle tax bracket instead of the lower one. Those making less than $45K don't get anything. Meanwhile people like myself in the much richer 90-200k income range get the full $679 tax break. Weird.


Precisely, this is an upper-middle class tax cut. This is a middle management, McMansion with an Audi in the garage tax cut. 

The average canadian weekly wage in 2014 was $982 or $51k a year. The average person will save 1.5% on $6k or save $90. That same average person would usually prefer investing in a TFSA, not an RRSP, which was reduced. My boss will get more of a tax break than I will.


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## Davis (Nov 11, 2014)

Sure, lots of people earning $45K a year can put $10,000 a year into a TFSA. Lots of them. ;-)


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## GoldStone (Mar 6, 2011)

I, for one, am eternally grateful to our new Liberal overlords. Our family's combined income is in the top 5%, maybe in the top 3%. We will get a tax break of $679 times two. Brilliant!!

Thank you, Justin.

Thank you, Liberal voters.


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## Eclectic12 (Oct 20, 2010)

Davis said:


> Sure, lots of people earning $45K a year can put $10,000 a year into a TFSA. Lots of them. ;-)


That's where more completed info is needed ... 60% of those maxing their TFSA are making $60K or under.

Also interesting is that despite the claims seen here on CMF that the high income levels are maxing out their TFSA, in the income range of $150K to just under $250K ... only 32% of TFSA holders in this range have maxed their TFSA. The income range of $250K and over have even less that have maxed out their TFSA.


http://business.financialpost.com/p...maxing-out-their-tfsas-from-all-walks-of-life


Despite what is "common sense" and what is spun ... what is happening is far more complex.


Cheers


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## Rysto (Nov 22, 2010)

Eclectic12 said:


> That's where more completed info is needed ... 60% of those maxing their TFSA are making $60K or under.


How many of those people are retirees with large porfolios? Or people with wealthy spouses or parents? This stat makes me laugh:



> The CRA stats show 267,000 Canadians who make less than $20,000 had contributed the maximum


Right. Because people living on $20K a year have $5500 laying around to contribute to their TFSAs. Just because their taxable income is $20K doesn't mean they're not wealthy.


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## Eclectic12 (Oct 20, 2010)

Rysto said:


> How many of those people are retirees with large porfolios?
> Or people with wealthy spouses or parents?


So what is your thinking? 
The parent who is not maxing out their TFSA is going money to kids to max out their TFSA?

It would be interesting to see more details to figure out what age groups are doing what. It would be even better correlate the kids of high income earners to the specific parents but I doubt we'll see that info.




Rysto said:


> This stat makes me laugh: ... Because people living on $20K a year have $5500 laying around to contribute to their TFSAs. Just because their taxable income is $20K doesn't mean they're not wealthy.


What makes you think they have to be wealthy?

I had high school class mates who parents paid for everything despite them working at jobs that paid $20 a hour, thirty years ago. Having basically all their income to spend with no expenses allowed them to afford a lot.


If they are on their own where they to pay their own expenses ... then yes, there would need to be other sources. 


Cheers


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## CPA Candidate (Dec 15, 2013)

Davis said:


> Sure, lots of people earning $45K a year can put $10,000 a year into a TFSA. Lots of them. ;-)


Strong rebuttal.

The fact of the matter is Canadians got duped into Trudeau's fake populism. A tax plan that creates a deficit (predicted by economists) and doesn't help average people at all. A plan that hurts people's ability to save that cannot really take advantage of an RRSP because they already in the lowest federal bracket. His first fiscal act is irresponsible and hurts the very people he claims to support. Bravo.


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## peterk (May 16, 2010)

^ Brilliant PR though.

The 200k tax bracket and TFSA reduction was clearly "sticking it to the rich" talking points, which the lower income class (left and right wing the same) I'm sure liked.

The "tax break for the middle class", as it was advertised, was I'm sure a hit with the socialists, pulling away NDP votes. Few of them probably did the math to realize that they weren't in fact considered middle class by this tax definition.

And the upper middle class, who likely were more conservative, probably _did _do the math, realized this tax break was for them, and may have been swayed to vote Liberal because of it.

All that's left is the ~2% above 200k folk, who I'm sure the median member of is a 50-65 year old working male. This boomer's children are now late high-school to post grad, soon adults. He probably just lost the income splitting with his stay at home wife. He says "screw it", decides to retire several years early, and takes his juicy 50-80k/year company pension or sell off his business and live off investments. He instantly becomes one of the upper middle class, getting the full $679 tax break. Nice.


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## The_Tosser (Oct 20, 2015)

CPA Candidate said:


> Strong rebuttal.
> 
> The fact of the matter is Canadians got duped into Trudeau's fake populism. A tax plan that creates a deficit (predicted by economists) and doesn't help average people at all. A plan that hurts people's ability to save that cannot really take advantage of an RRSP because they already in the lowest federal bracket. His first fiscal act is irresponsible and hurts the very people he claims to support. Bravo.


+1


lmao and yes, no-one pointed that out prior to voting date, rofl. This was the only issue that mattered, and ignorant canadians ignored it completely.

I continue to state what is so obvious to me. People are dumb as rocks and do everything they can to ensure the best chance of personal harm possible.

Dumb as rocks. A majority gov no less, roflmao, ya got what ya asked for. Hope you eat it raw and it gags you all the way down. The best part is canadians won't be any smarter next time either. rofl.


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## mrPPincer (Nov 21, 2011)

Alright naysayers.. lay off please..

I would like to suggest we nominate JT's hair for a nobel peace prize, anybody else agree?


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## Davis (Nov 11, 2014)

It seems pretty likely that middle income people who can put $5500 or $10,000 into a TFSA are seniors who have money in taxable accounts. So it isn't an incentive to save - it is another tax break for seniors. Nothing against seniors, but let's not pretend that this is helping middle income working families to save.


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## Moneytoo (Mar 26, 2014)

mrPPincer said:


> Alright naysayers.. lay off please..
> 
> I would like to suggest we nominate JT's hair for a nobel peace prize, anybody else agree?


And Sophie's butt! :biggrin:

(via http://www.greaterfool.ca/2015/12/10/lucky-us/ lol)


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## GoldStone (Mar 6, 2011)

Davis said:


> It seems pretty likely that middle income people who can put $5500 or $10,000 into a TFSA are seniors who have money in taxable accounts. So it isn't an incentive to save - it is another tax break for seniors. Nothing against seniors, but let's not pretend that this is helping middle income working families to save.


Forget TFSA. TFSA rollback is easily defensible. 

The middle-class tax cut, on the other hand, is bizarre and incoherent.

Real middle class gets very little out of it, if anything. Most benefits accrue to the upper-middle class people who are doing very well already. How can you justify a tax break to the families where both spouses make more than 90K? What is the public policy goal here? We are adding $1.2B to the deficit why?


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## mrPPincer (Nov 21, 2011)

As a low income earner (15K earned income plus whatever my limited portfolio might do), I get nothing from the so-called middle-income tax break.

When the TFSA limit was 5.5K I did somehow manage to put aside that amount of new money each year btw, but the 10K limit would have allowed me to move some of my non-r savings over.

Even making 15K per year, I am still able to set aside some savings, it was time to purchase another car last year, so that wiped out 2014 savings, but I put in 2K this year so far.

So don't tell me that somebody making 45K can't put away 10K into TFSA Davis 
___

& Rysto..


> > The CRA stats show 267,000 Canadians who *make less than $20,000* had contributed the maximum
> 
> 
> Right. Because people *living on $20K* a year have $5500 laying around to contribute to their TFSAs. Just because their taxable income is $20K doesn't mean they're not wealthy.


^there is a difference.. maybe that's exactly why they may be *not* not wealthy


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## none (Jan 15, 2013)

^ You do know you get the TFSA room back right?


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## mrPPincer (Nov 21, 2011)

^sell high buy low?


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## mrPPincer (Nov 21, 2011)

doh, sorry none, yeah I know the rules, you put it back in the next year, (most of my savings sit in non-r).


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## HaroldCrump (Jun 10, 2009)

Decapitate the TFSA - done
"Middle class" tax cut - done

When are they rolling back OAS eligibility age to 65, as promised?


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## andrewf (Mar 1, 2010)

What is the urgency? It isn't due to take effect until well after the mandate of this government.


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## heyjude (May 16, 2009)

andrewf said:


> What is the urgency? It isn't due to take effect until well after the mandate of this government.


I find it laughable that people expect the new government to do everything immediately. They have gotten a lot done in six weeks. Patience!


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## Beaver101 (Nov 14, 2011)

^^LOL ... voters are anxious (worry) of a retraction of a *promise*.


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## humble_pie (Jun 7, 2009)

HaroldCrump said:


> Decapitate the TFSA - done



language usage is so interesting. The way i see it, the TFSA news has nothing to do with decapitation. It's simply restoring the TFSA to what it was before stephen harper offered a temporary increase as a bald-faced, undisguised vote bribe.

the liberals have said they'll increase TFSA according to inflation. That's good enough for me. it's certainly not the best arrangement for canadians, because official gummint inflation figures seem to be kept at such artificially low levels, but it's good enough.


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## heyjude (May 16, 2009)

Beaver101 said:


> ^^LOL ... voters are anxious (worry) of a retraction of a *promise*.


Maybe, but some changes are complex and need time. Take, for example, physician assisted death. The Supreme Court of Canada ruled that this was a right and decreed that legislation must be brought in within one year, i.e. by February 2016. The previous government waited as long as possible before appointing an expert panel, making it impossible to meet the deadline even if they had been reelected. This is an issue that requires much consultation and deliberation to get good legislation. The new government has petitioned the Supreme Court for a 6 month extension. I think that's a good decision.


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## Beaver101 (Nov 14, 2011)

heyjude said:


> Maybe, but *some changes are complex and need time. Take, for example, physician assisted death*. The Supreme Court of Canada ruled that this was a right and decreed that legislation must be brought in within one year, i.e. by February 2016. The previous government waited as long as possible before appointing an expert panel, making it impossible to meet the deadline even if they had been reelected.* This is an issue that requires much consultation and deliberation to get good legislation. **The new government has petitioned the Supreme Court for a 6 month extension. **I think that's a good decision*.


 ... I agree 110% on this.


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> language usage is so interesting. The way i see it, the TFSA news has nothing to do with decapitation


Trudeau droolers will keep denying it, of course.
Both the NDP & the Liberals have been baying for the blood of the TFSA from the very day it was introduced.
The NDP started first, and the Liberals joined in.

All the left-leaning, union funded think tanks such as the CCPA, Broadbent Institute, etc. have been publishing "report" after "report" showing how TFSA is a tax break for the rich, and how it must be abolished.

It is too late to completely scrap the program, but they have done the next easiest option.



> It's simply restoring the TFSA to what it was before


What else is being restored to what it was before Stephen Harper?
OAS going back to 65?
GST going back to 7%?
What else?
Roll back the RDSP?
Is there a list of how far back the Trudeau govt. will go to undo all the "damage" done by the Harper years?



> stephen harper offered a temporary increase as a bald-faced, undisguised vote bribe


And none of the promises made by Justin Trudeau during the election campaign were *bald-faced, undisguised vote bribes*?
Really?


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## techcrium (Mar 8, 2013)

It seems to me that people are more angry when something is expanded and subsequently rolled back then if it wasn't expanded in the first place.


For example, pure hypothetical, let's say Harper distributed $50,000 for free to you each year that he is PM starting in 2015. Then Justin got elected and he took that privilege away from you.

Should you be angry? Perhaps...

However, instead, why don't you change your mindset and welcome that one time $50,000 offer as a Harper benefit? You will live a lot more happier with this attitude.


People here are expecting $10,000 contribution limit as the standard, and are getting angry. Why don't you instead expect $0 contribution as the standard and be glad that Justin didn't rolled out the TFSA completely?


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## techcrium (Mar 8, 2013)

Every single one of us knew exactly the platform of Justin. It's not like he came out of nowhere and did this suddenly...


I honestly thought that he would roll back the 2015 limit as well and I am pretty happy he didn't...


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## Mortgage u/w (Feb 6, 2014)

In regards to the new TFSA limit for 2016, I think we should just accept and appreciate whatever limit we are given. 
We can argue all we want; (vote bribe, rich tax break, etc.), but bottom line, I consider it a great privilege to be able to shelter a taxable income - even if its $1.00.


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## humble_pie (Jun 7, 2009)

HaroldCrump said:


> Trudeau droolers will keep denying it, of course.
> Both the NDP & the Liberals have been baying for the blood of the TFSA from the very day it was introduced.
> The NDP started first, and the Liberals joined in.
> 
> ...




i love the above quote. It's a perfect example of why language usage is so interesting.

it may have been "baying for blood" to you. But me i wouldn't look for blood in minor unimportant Treasury budget items such as tax-free savings accounts, so to me the liberal party platform has always appeared to support TFSAs.

as many in cmf forum have frequently discussed, the time may come when TFSAs should be capped at a certain contribution level. A lifetime contribution limit of $100,000 is often bruited about. In the same manner, caps on small business capital gains exemptions also exist, there have been one-time only universal but capped capital gains exemptions in the past, so capping TFSA contributions would be nothing new.

not that my opinion matters, but i don't think any lifetime TFSA contribution cap level has yet been reached. We're only at $41,000 maximum contribution so far. Long way to go to reach $100k.

the appeal of a contribution cap is that it would not limit the actual tax-free profit potential. That would be up to the individual entrepreneurial investor. Some talented investors might do better, but the beauty would be that every canadian would have a shot at amassing a very attractive tax-free nest egg, even using a basic couch potato strategy.

what kind of political party would screw that up? Harold, here's a useless bet, since we'll never know: using the future conditional tense ("language is so interesting") i'd be willing to bet you an interesting amount of money that even the NDP, if they had elected thomas mulcair as prime minister leading a majority government, would *never* have eliminated the canadian TFSA.

there you go, are we on?


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> Harold, here's a useless bet, since we'll never know: using the future conditional tense ("language is so interesting") i'd be willing to bet you an interesting amount of money that even the NDP, if they had elected thomas mulcair as prime minister leading a majority government, would *never* have eliminated the canadian TFSA.
> 
> there you go, are we on?


Of course it is a useless bet, and you know it.
I said as much in my post above that - "_It is too late to completely scrap the program_".

It will be a bureaucratic nightmare to eliminate the TFSA completely.
It will be absolute, utter chaos.

The 2011 federal elections was already too late to scrap the TFSA.
Far easier to play with the limits to serve specific political ends - if the doubling was a bribe, so was the reduction - both are intended to win over specific vote banks.

In the end, it boils down to the basis of fiscal policy - revenue vs. expenditure.
If the goal is to create a temporary stimulus by running a budget deficit (and the Trudeau govt. has made it more than clear that is the goal and they are committed to it), I see no reason why tax breaks are being clawed back, tax rates hiked etc.

The stimulus effect can be created by leaving the TFSA where it is (i.e. $10K), implementing the middle income tax cut, not raising the top tax tier, not scrapping the family tax cut, etc.
The deficit gap can easily be achieved by lower taxes, and use the deficit for infrastructure spending, social program, more refugees, whatever it may be.

Which is why the tax changes being made are more ideological than practical.
It is driven by this ideological imperative to rollback/undo all policy from the Harper years.


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## humble_pie (Jun 7, 2009)

^^

i like useless bets. Even with real bets, i never pay.

as you can see, i'm just a poor ignorant biscuit, certainly no match for a fire-breathing economist.


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## HaroldCrump (Jun 10, 2009)

^ nothing too fancy...all I am saying is that Trudeau govt's fiscal policy goals could have been achieved without so many tax changes, esp. in the first year.
Most of the changes seem motivated by ideological reasons ("undo damage done by Harper").


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## humble_pie (Jun 7, 2009)

HaroldCrump said:


> if the doubling was a bribe, so was the reduction - both are intended to win over specific vote banks



i for one don't see anything too horrifically appalling about voters communicating with politicians during election campaigns, nor about politicians tailoring some plans - or promises, call them what you will - according to what the people are saying they want.

in addition to actual ballots cast on election day, the above exchange forms a rough kind of political bartering. Me i'm all for it.


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> i for one don't see anything too horrifically appalling about voters communicating with politicians during election campaigns, nor about politicians tailoring some plans - or promises, call them what you will - according to what the people are saying they want


Okay, fair enough, but you used the term _bald-faced, undisguised vote bribe_.
That doesn't square well with _voters communicating with politicians...politicians tailoring some plans_...

Do you mean Harper's did a _bald-faced, undisguised vote bribe_ but Trudeau was _communicating with his voters and tailoring his policy_?


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## peterk (May 16, 2010)

^ Language usage is so interesting, isn't it?


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## Eclectic12 (Oct 20, 2010)

HaroldCrump said:


> ... It will be a bureaucratic nightmare to eliminate the TFSA completely.
> It will be absolute, utter chaos ...


What chaos?

Pass a law that says as of Jan 1st, 2017 .... the TFSA is taxable. 
Or are you confusing tax payer backlash and/or political suicide with bureaucratic procedures?




HaroldCrump said:


> ^ nothing too fancy...all I am saying is that Trudeau govt's fiscal policy goals could have been achieved without so many tax changes, esp. in the first year.
> 
> Most of the changes seem motivated by ideological reasons ("undo damage done by Harper").


I guess the votes gained were a side benefit as opposed to the other way round?


Cheers


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## HaroldCrump (Jun 10, 2009)

Eclectic12 said:


> What chaos?


I meant retroactively canceling the TFSA.

There were some concerns until last week whether the TFSA decapitation will be retroactive to 2015.


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## humble_pie (Jun 7, 2009)

HaroldCrump said:


> Okay, fair enough, but you used the term _bald-faced, undisguised vote bribe_.
> That doesn't square well with _voters communicating with politicians...politicians tailoring some plans_...
> 
> Do you mean Harper's did a _bald-faced, undisguised vote bribe_ but Trudeau was _communicating with his voters and tailoring his policy_?



yes that's it
it's that language thing again


... my candidate communicated with his voters & tailored his policy to what he perceived to be their principal needs;

... you are a rare & admirable middle-of-the-roader who manages to combine conservative libertarian economics with a progressive, insightful foreign policy;

... he is a promiscuous bald-faced briber of votes.


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## Brian K (Jan 29, 2011)

... he is a promiscuous bald-faced briber of votes ....who are you referring to?


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