# TFSA limit doubling to 11k



## james4beach

Breaking news this morning, carried on CBC Radio and 680 & 1010 Radio in Toronto.

Saying the federal government is about to *increase the annual TFSA amount from $5,500/year to $11,000/year*

http://www.680news.com/2015/04/07/feds-to-double-annual-contribution-limit-to-tfsa-report/
http://www.newstalk1010.com/news/2015/04/07/report-tfsa-limit-increase-imminent


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## the_apprentice

So excited! Wooooo!


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## Eder

It's pretty strange of a government to actually try to carry out it's campaign promises.


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## humble_pie

election coming up, they must have seen this as one simple, stark issue to rally the most votes

does fine print say that TFSA investors may not earn more than bank of canada prime rate or else the CRA going to get ya, though


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## Getafix

This is awesome! It doesn't say when it will be effective from? Will we be able to contribute an extra $5500 for 2015?


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## andrewf

Is this contingent on being re-elected?

This will benefit me directly, and indirectly (through my parents & their ability to shelter a more substantial portion of their current assets). Not sure it is good policy, though. This is probably equivalent to giving a slight cut to the top few income tax brackets. Almost no-one earning less than the second fed income tax bracket will benefit from this.


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## james4beach

I will not vote Conservative, and I won't change my vote based on the TFSA.


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## Pluto

Why announce that now.....? Oh I get it, Duffy trial begins. Give people something else to talk about, and take some press space and time to TFSA's.


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## none

Yes this is classic conservative monetary policy - short sighted programs that appeal to the masses yet are not good for the financial well being of the country. This is the same as the GST cut. It did nothing but buy votes and increase the deficit. What a bunch of morons.


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## 1980z28

james4beach said:


> I will not vote Conservative, and I won't change my vote based on the TFSA.


+1


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## humble_pie

andrewf said:


> Is this contingent on being re-elected?


one would have to say resounding Yea. Look at the timing. Federal election fall 2015. Increased TFSA contribution to commence january 2016.

short-term, most folks in cmf forum will benefit.

certainly the middle class & above will benefit. Will the amount they eventually spend when they get around to withdrawing from their swollen TFSAs be enough to kickstart or support an economy? me, i doubt

lower middle class, working lower class & ever-growing number of marginalized will suffer. Less tax revenues = less social support systems = breeding ground for jihadi & other disillusioned youth.

if the PC are re-elected & they do carry out this bread-&-circus stunt, to me it merely indicates that any subsequent liberal-NDP coalition government will rescind the TFSA program all the sooner.

PS another election campaign benefit for the conservatives will be that - assuming the liberals & the NDP oppose a TFSA increase - the issue will take all of the attention & all of the heat away from the defence budget.


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## Chris L

Any way for people to get ahead and save is a good thing. The rest, well, they can vote however they want. But I always vote for the government to stay away from my money.


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## none

Chris L said:


> Any way for people to get ahead and save is a good thing. The rest, well, they can vote however they want. But I always vote for the government to stay away from my money.


And that is generally short-sighted and akin with always going with the lowest bidder.


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## Guban

Pluto said:


> Why announce that now.....? Oh I get it, Duffy trial begins. Give people something else to talk about, and take some press space and time to TFSA's.


+1 
Bribing us with our own money! A time proven method of getting re elected, if not doing what is necessarily best for everybody.


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## humble_pie

i'm happy to see there's hope for cmf forum after all. Quite a lot of skeptical folk on here who are not taken in by bread & circuses.


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## Guban

Chris L said:


> Any way for people to get ahead and save is a good thing. The rest, well, they can vote however they want. But I always vote for the government to stay away from my money.


They are not staying away from your money necessarily, but can borrow more to fulfill this promise. Lowering taxes while balancing the books would ensure that they stay away from your money.


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## Chris L

Any measure that helps produce wealth is a good thing.


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## none

Chris L said:


> Any measure that helps produce wealth is a good thing.


Like slavery and selling meth?


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## sags

1) Harper convenes a conference on pensions and retirement

2) Harper ignores their advice and introduces the Pooled Pension Plan idea.

3) Harper refuses to expand the CPP.

4) Harper pushes back the qualification age of the OAS/GIS to 67.

5) Harper increases the TFSA limit.

The pattern seems to be to direct Canadian's retirement money into the welcoming arms of the insurance companies and banks.


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## lonewolf

The government should never be allowed to borrow money. Maybe the easiest way for government to pay off its debt is for interest rates to go to below zero, with no more borrowing. Most likely out come Canada will default on their bonds there is no way the government ever intends to pay back all the debt. I rate government bonds as junk backed by no assets only an overburden tax payer


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## fplan

lifetime cap @100k will make everybody happy..


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## Woz

Link to the memo: http://cdn.ipolitics.ca/wp-content/uploads/2015/04/Minister-Oliver-Memo-to-CPC-Caucus_EN.pdf

I'm curious to see when it will take effect. Key quote from the memo:

"During the 2011 election, Prime Minister Stephen Harper committed to doubling TFSAs once the budget was balanced. Canadians know that we stick to our commitments. And on April 21st I will present a balanced budget that will make life more affordable for Canadians."

TFSA will double once the budget's balanced. Budget will be balanced in 2015. Kind of makes it sound like it will take effect in 2015, but who knows ...


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## none

lonewolf said:


> The government should never be allowed to borrow money. Maybe the easiest way for government to pay off its debt is for interest rates to go to below zero, with no more borrowing. Most likely out come Canada will default on their bonds there is no way the government ever intends to pay back all the debt. I rate government bonds as junk backed by no assets only an overburden tax payer


This is idiotic. If this had merit then no one should be able to borrow money ever. debt is a very useful tool.


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## humble_pie

fplan said:


> lifetime cap @100k will make everybody happy..



that's a plan i could go for, especially if it meant capping only the contributions at $100k for a lifetime.

after that, contributions would be left to earn interest & dividends, capital gains, other income, without limit.

everyone would have the same lifetime opportunity. No one could take advantage. At the end of the marathon, the very last lap would be to the swift, but along the route everyone would have had a chance to race.


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## My Own Advisor

Pluto said:


> Why announce that now.....? Oh I get it, Duffy trial begins. Give people something else to talk about, and take some press space and time to TFSA's.


+1  This is the way the Conservatives roll!


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## My Own Advisor

Why a cap at all?


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## sags

A cap sounds like a good idea.

Of course this is all nothing more than the proverbial shell game.

The government sold GM shares for 3 Billion, so they could claim a balanced budget this year, so they could justify raising the TFSA.

Unless they have other big assets to sell.............Canada will be in deficit budgets again next year.


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## sags

Harper was also on CTV answering audience questions in Vancouver, while the Duffy trial was on today.

It looks like a full out plan to divert as much news as possible.

Or maybe, they forgot the date when the trial opened................


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## fplan

and keep the annual contribution @5500. otherwise wealthy parents simply deposit 100K in kids account. which will create uneven playing ground..


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## gardner

> Canadians know that we stick to our commitments.


Like with Income Trusts?


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## My Own Advisor

gardner said:


> Like with Income Trusts?


Good one Gardner.

I hope they never cap the TFSA. The reality is, only a few folks will be able to max out the TFSA in the years to come at $11,000 per person. At least this way, using the RRSP and TFSA, you have options.

Now the TFSA limit will be $11k, it makes the RRSP largely obsolete for lower- to med- income earners.


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## InvestmentIQ

My Own Advisor said:


> Good one Gardner.
> 
> I hope they never cap the TFSA. The reality is, only a few folks will be able to max out the TFSA in the years to come at $11,000 per person. At least this way, using the RRSP and TFSA, you have options.
> 
> Now the TFSA limit will be $11k, it makes the RRSP largely obsolete for lower- to med- income earners.


That's right, no point in contributing too much to RRSP any more if your income is not 6 digits or something like that. Now, isn't it funny that government was trying to crack down on those people that had way too much in their TFSA, and yet they want to increase the limit again. I see... Election time!


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## OnlyMyOpinion

gardner said:


> Like with Income Trusts?


You're right - the Cons did promise not to tax inc trusts and then did an about face in 2006, announcing taxation of inc trusts beginning in 2011. A good summary here: http://www.dividendninja.com/what-happened-to-the-income-trusts-1/
For a moment I thought this thread was all about slamming the Cons for not taxing us enough. I'm sure then that most on this thread were happy that the Cons essentially put the boots to inc trusts just before the RY, BCE, T converted to inc trusts. In 2005 (according to the Libs then in power) the snowball had grown to $600MM of lost tax revenue.


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## Eder

sags said:


> A cap sounds like a good idea.
> 
> Of course this is all nothing more than the proverbial shell game.
> 
> The government sold GM shares for 3 Billion, so they could claim a balanced budget this year, so they could justify raising the TFSA.
> 
> .


So we bought GM shares with the intent to never sell them? Why wouldn't we sell them now? (Unless you thought the shares were not yours?)


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## OhGreatGuru

One more reason not to vote Conservative. We need an analysis by the PBO of what this is going to cost the Treasury long term; and of what income bracket will benefit the most.


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## Chris L

Amazing the hate on for the TFSA boost. Are these the same folks who think we should raise income taxes? Do these people even exist? Income tax is robbery - the only tax should be on consumption - and I don't care at what rate. Taxing productivity is backwards.


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## GoldStone

Chris L said:


> Amazing the hate on for the TFSA boost. Are these the same folks who think we should raise income taxes? Do these people even exist? Income tax is robbery - the only tax should be on consumption - and I don't care at what rate. Taxing productivity is backwards.


Some of the most vocal haters in this thread are government workers. Not going to name the names but we all know who they are. It's amazing they find the time to post their hate right in the middle of a work day - probably right from their government cubicles. More tax revenue = more money in their pockets (their militant unions will see to that). So the hate is not at all surprising. Follow the money trail.


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## andrewf

OnlyMyOpinion said:


> You're right - the Cons did promise not to tax inc trusts and then did an about face in 2006, announcing taxation of inc trusts beginning in 2011. A good summary here: http://www.dividendninja.com/what-happened-to-the-income-trusts-1/
> For a moment I thought this thread was all about slamming the Cons for not taxing us enough. I'm sure then that most on this thread were happy that the Cons essentially put the boots to inc trusts just before the RY, BCE, T converted to inc trusts. In 2005 (according to the Libs then in power) the snowball had grown to $600MM of lost tax revenue.


I think we are all (or at least, should be) in favour of smart/efficient taxation, that maintains some level of equity. We probably disagree about optimal levels of taxation/spending as a % of GDP. But we should be able to agree on whether particular cuts/increases in taxes are not improving tax efficiency. I question the merits of this particular tax cut, in relation to the other choices available for equivalent reductions in revenue. A reduction in personal or corporate incomes taxes could have had a bigger positive impact, $ for $. The GST cut was particularly egregious, because that $15 - $20 billion in annual revenue could have financed significant cuts in income taxes, which are more economically harmful.


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## andrewf

Chris L said:


> Amazing the hate on for the TFSA boost. Are these the same folks who think we should raise income taxes? Do these people even exist? Income tax is robbery - the only tax should be on consumption - and I don't care at what rate. Taxing productivity is backwards.


So why support TFSA rather than direct income tax cuts?


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## nathan79

andrewf said:


> income taxes, which are more economically harmful.


How so? I always hear this, but never see the evidence.

You have to be careful with consumption taxes, because if you raise them too much people will cut back on consumption and the economy slows down. People will also do transactions "under the table" to avoid paying them. Cross border shopping is already hurting retailers, and it certainly would become worse with high consumption taxes.

Not to mention the regressive effect of consumption taxes on lower income people.

Besides that, the government would never raise enough revenue without income tax.


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## andrewf

Here is a good summary:

http://object.cato.org/sites/cato.org/files/pubs/pdf/PA669.pdf

See table 1 for some empirical estimates of deadweight losses of various US taxes. Their tax system is a bit different than ours, but it demonstrates the effect in a more general sense.


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## doctrine

While other types of income cuts may be better, they're not coming. I am quite happy with a TFSA limit increase. The government can always change the rules at any time, anyway. Doomsday scenarios of $billions of lost taxes by 2060+ and infinite suffering of the poor are highly speculative at best. One stroke of a pen is all it takes to revert the rules.


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## diharv

Yet another fiscally irresponsible move by this govt. I mean I'll try to use it to it's maximum but don't feel it is any good for the economic well being of the country going forward. For the top 10 %ers or whatever number it is ,that can afford to use it yeah it's great but for the vast majority irrelevant. To balance this budget there likely will be some very clever manipulations of the figures . I would have more respect for this govt if they just came out and said it could not be balanced but they seem to be hell bent on doing it . The delay was probably to give their creative accounting dept time to figure out how to fudge the numbers to make them fit. 
Also I am only guessing but I would think the increase would kick in Jan 1 2016 but with these boneheads in full vote purchasing mode they may make it retroactive to the beginning of this year.


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## CPA Candidate

Apparently CMF is a bastion of socialists.

I'm looking out for myself and my family and I'll take any edge I can get to increase our security and maximize our wealth.


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## protomok

Well I for one will be voting for the Conservatives because they are the ONLY party that is reducing taxes for Canadians.

Sure I would prefer to see a reduction in income taxes instead of a TFSA contribution limit increase but what is the alternative? Is Justin going to reduce income taxes ?


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## Chris L

CPA Candidate said:


> Apparently CMF is a bastion of socialists.
> 
> I'm looking out for myself and my family and I'll take any edge I can get to increase our security and maximize our wealth.


Precisely. I can't get how this 'investment' forum is so hellbent or ruining the individual to TRY to save the whole. Over and over again, this fails. So any time I can take someone else's hand out of my pocket, I will.

I don't have the answer to socialism or saving other people and I stopped trying to come up with solutions to save other people long ago. With freedom comes some discomfort - better someone else then me. And who is the government to decide that money from my pocket is best served in someone else's. Prosperity will come from saving and investing. Those who are given the opportunity to grown enough wealth into their old ages will be those not needing hand-outs. The money eventually goes back into the system regardless. Why not permit them to reside in the hands who produce it to begin with. I've never seen a government do better with my money than I could do for myself (as far as my own happiness is concerned). Health care exempted.


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## none

No, you 'lower taxes regardless of anything' guys are just myopic short sighted fools that can't look past your next paycheck. This is a long game and not just about trying to save up for the next new piece of crap from china.

For what it's worth, the most inefficient organizations I've ever worked for have been private industry. The idea that government workers are prone to sloth and just feed at the trough doesn't hold up to my experience at least.



Chris L said:


> Health care exempted.


LOL.

or roads, or municipal infrastructure, or national defence, or international negotiation, or or or.......

<eye-roll>


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## Eclectic12

fplan said:


> and keep the annual contribution @5500. otherwise wealthy parents simply deposit 100K in kids account. which will create uneven playing ground..


I'm not following what is being suggested ... are you saying some will have an $10K TFSA allotment and those with kids will have half as much?
If so, this sounds like it's going to be expensive to administer ... not to mention subject to a lot challenges.

If you mean keeping the annual allotment at $5500, where those eligible get the same allotment ... how is that doing much to even the playing field?


I also wonder how much of a benefit is ... the max a parent could contribute is limited to the kid's TFSA contribution room. For someone who was 18 in 2009 and is now 25, that's somewhere around $36.5K. Where a parent has stashed $100K for a single kid, there's going to be a minimum of a 1% penalty on the over-contribution. With the amount being so much over the limit, I'd expect CRA to trigger the higher penalty of 100% of the gain.


Then too, how many parents are going to trust their kid won't spend the money?


Cheers


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## Guban

CPA Candidate said:


> Apparently CMF is a bastion of socialists.
> 
> I'm looking out for myself and my family and I'll take any edge I can get to increase our security and maximize our wealth.


I certainly don't view myself as a socialist, and it seems to me that the posters that are against a TFSA increase are against it for the good of the country. I am concerned that a decrease in tax revenue without a corresponding, or larger decrease in expenditure is a recipe for disaster. This is how democracy, in my view should work. Informed people choosing what is best for the country.

Your looking out for yourself comment is completely understandable, but has lead the country to where it is now: hugely in debt. Why run the country in a responsible fashion and make the right, but tough, choices when the politicians can bribe us with borrowed money?


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## gardner

Eclectic12 said:


> are you saying some will have an $10K TFSA allotment and those with kids will have half as much?


If the TFSA was handled like the RDSP, which has a lifetime cap, but no yearly limit, then folks with bags of cash could load up on the first day -- gift your kids the full $100K limit on their 18th birthday to get the maximum in there right out of the gates. If there was a $10K/year limit, it would instead take 10 years to get there and, I guess, help level the playing field for folks who couldn't afford to fill up immediately.


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## Eclectic12

Chris L said:


> I can't get how this 'investment' forum is so hellbent or ruining the individual to TRY to save the whole


Not having a TFSA is going to ruin someone's financial health?
I wonder how Canada survived so many years without it.




Chris L said:


> Health care exempted.


So when health care reaches the point the wasting so much money that the gov't cancels the TFSA, you'll be okay with it?


Cheers


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## Eclectic12

gardner said:


> If the TFSA was handled like the RDSP, which has a lifetime cap, but no yearly limit, then folks with bags of cash could load up on the first day -- gift your kids the full $100K limit on their 18th birthday to get the maximum in there right out of the gates.
> 
> If there is a $10K/year limit ...


Okay ... now I get the concern ... though from what I recall, the cap I recall being talked about seemed to be more an addition to the annual limit. The yearly amount would restrict how quickly money could be added and the cap would prevent multimillion dollar TFSAs.

I've been popping in and out of the thread ... so maybe I missed someone who was suggesting a cap replace the annual allotment.


Cheers


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## fplan

treat this like RRSP.. you have to earn the contribution limit..like 18 yr old limit 5500, when you turn 19 you get another 5500 like that.. and lifetime cap @ 100k..


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## uptoolate

Good news for the kids. They can use the money to replace their lost OAS.


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## IFITSTOBEITSUP2ME

uptoolate said:


> Good news for the kids. They can use the money to replace their lost OAS.


It's all smoke and mirrors as always. Robbing Peter To Pay Paul, and what one gains on roundabouts typically one loses on the swings, doesn't feel as though we get any further forward as individuals with anything they bring out, someway it always costs us more when it all shakes out. Personally our family would like to see accountability plus time and motion studies done on the places and employees our taxation dollars of all forms and all levels of governments/officialdoms we are funding. Well, one can dream can't one?


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## newfoundlander61

Too bad you couldn't dump the extra money in early, but I would bet Revenue Canada would nail you for an over contribution by checking the deposit date. Oh well will be ready to go the day it is allowed.


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## steve41

A 30 year-old earning 70K, retiring at 60 will
enjoy a $40,048 'die-broke at 95' lifestyle with the current $5500 TFSA limit and $40,410 if it goes to $11000. $30 bucks a month! This is a big deal???


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## Chris L

Hey, all those that want to pay more taxes to fund the government, go right ahead. Just claim you earn more and be done with it. YOU can help the government and it's workers. I'm not going to be a cent more than I need to and I'm also going to vote for any measure the decreases my burden. I don't trust that the government in the long run can make proper decisions for my benefit.

What has kept Canada moving forward? Debt. Spending beyond our means. We're already bankrupt, we just don't act like it. Even if you took away all the wealth we'd be broke.

Time to start selling off our crown corporations and crown land.

I'd rather not go down with the ship.

Socialism is alive and well with you folks.

Take the TFSA limit and use it. MOST people won't - and this is exactly why it's NOT A PROBLEM. But it's there, for them, to use. If they really want to move up a class, they can. Having opportunities to become wealthy is exactly what this country needs!

Upward mobility, opportunity. Stop smashing your heads against a brick wall and accept this gift that has been given to you - to keep more of your own money.

Don't like that option - DONATE IT TO THE POOR! Pay off someone else's debt. Give someone a job. The TFSA gives you personal OPTIONS.


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## Eclectic12

newfoundlander61 said:


> Too bad you couldn't dump the extra money in early, but I would bet Revenue Canada would nail you for an over contribution by checking the deposit date...


As I understand it ... the changes haven't been introduced and even when they are, the effective date is not yet clear. I'm not sure why CRA applying what's currently in effect is "nailing" anyone.

Would be nice to make use of what's coming earlier? Sure ... but if one is going to blame anyone for the lack of opportunity, it should be those in charge, n'est pas?


Cheers


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## Eclectic12

fplan said:


> treat this like RRSP.. you have to earn the contribution limit...


Interesting idea but other than placing limits ... it is not leveling the playing field as it does not change the ability of the parent to send excess cash to child's account.


Cheers


*PS*

If the concern is the advantages of the wealthy ... isn't the TFSA's $5.5K or whatever it is increased to more of a drop in the bucket? For example, I've have thought the ability to setup a corp, have kids have eligible dividend paying shares so that somewhere around $50K is passed over *per year* before paying personal income tax would be more of an issue.


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## humble_pie

uptoolate said:


> Good news for the kids. They can use the money to replace their lost OAS.



best argument so far


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## Davis

CPA Candidate said:


> Apparently CMF is a bastion of socialists.
> 
> I'm looking out for myself and my family and I'll take any edge I can get to increase our security and maximize our wealth.


Yeah, no. We can be sure thhat there aren't any socialists on CMF. CMF can be home to some good public public policy debates. But when it descends into name-calling, it really serves no good purpose. It is a pity that it comes to this.


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## Eclectic12

Chris L said:


> Hey, all those that want to pay more taxes to fund the government, go right ahead...
> I'm not going to be a cent more than I need to and I'm also going to vote for any measure the decreases my burden. I don't trust that the government in the long run can make proper decisions for my benefit.


Decreases your burden in the short term ... but will you be any further ahead without the gov't reigning in their growth, tax cuts and boondoggles?




Chris L said:


> ... We're already bankrupt, we just don't act like it. Even if you took away all the wealth we'd be broke.
> Time to start selling off our crown corporations and crown land...
> I'd rather not go down with the ship.


If you really believe this ... what's your plan for the bill comes due and can no longer be avoided?

As for selling off crown corps ... isn't that why up to 40% of the world's supply of medical isotopes is disappearing in 2016? 
I'm not sure why Canada can't take what they are world leader at and make it profitable ... oh ya, that takes work, political will and vision instead of following the easy corporate recipe book of "sell, sell, sell".



Chris L said:


> ... MOST people won't - and this is exactly why it's NOT A PROBLEM ... Having opportunities to become wealthy is exactly what this country needs!


From what I've read here on CMF ... most are using it (Check out the CMF thread talking about $60K to $100K TFSAs as well as the threads about who is maxing their TFSA).

Then too, on one hand the country is bankrupt beyond hope but on the other hand, you are saying to keep on partying as if it isn't ... this sounds like you are hoping you outlive when the party ends.




Chris L said:


> ... Don't like that option - DONATE IT TO THE POOR! Pay off someone else's debt. Give someone a job...


What makes you think those posting are not already doing this?
(See the CMF thread on charities.)


Cheers


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## andrewf

These discussions make me wonder what people are willing to do to cut their tax burden. These are, I'm guessing, the people who are perfectly content to let poor people die due to lack of health care, since it might impact their ability to buy a larger vacation property in retirement.


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## Chris L

andrewf said:


> These discussions make me wonder what people are willing to do to cut their tax burden. These are, I'm guessing, the people who are perfectly content to let poor people die due to lack of health care, since it might impact their ability to buy a larger vacation property in retirement.


That's a slippery slope.

I'm failing to see how the government is ever going to fix poverty. So if they don't come up with a new plan, then what's the point in funding it further?

"Leveling the playing field" pure socialism. And be quiet about setting up corporations. The wealthy are wealthy because they find ways to maximize their fitness through a sea of rules and regulations. The TFSA is a gift to the middle class. The wealthy could care less about $5500 or $11,000 a year in sheltered income. It takes a lifetime for the allotment to accumulate to something significant.

$11,000 x 30 years x 0.03% (withdrawal) = $9,900 sheltered from taxes. Plus compounding (3x or 4x or ?). Big whoop to someone earning over $150k/year. 

The TFSA in and of itself is a boon to the middle class. It's one less person relying on government hand outs and gives the power back to the people to manage their own affairs. To reach retirement, people need all the help they can get. 

P.S. If things get really bad in Canada, I'll move! I'm looking out for myself. I can't look out for other people because they wouldn't listen even if I bothered (and I have). People could easily afford to put away $500 a month, but they're busy buying overprice real estate and big screen tvs and monthly tv packages at $100 a month plus cell phones and expensive coffee. Don't tell me they CAN'T afford it, they CHOOSE not to.

This is becoming absurd. Use the TFSA, love it, boost the contribution room. It's go for ANYONE that chooses to use it, especially the middle class.

Stop handicapping people who are trying to get ahead. Totally absurd. You're asking the government to tax you more!?! Are you off your rockers?


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## Eder

Looks like less than 25% of eligible Canadians max their TSFA now...I suspect less than 10% will after the increase. 

http://www.theglobeandmail.com/incoming/article23828599.ece/BINARY/image.jpg


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## tenoclock

I fully agree with Chris L. The poor in Canada could probably be classified as being in the top 5% of the global population. Take this from someone who is an immigrant and seen what real poverty is like up and close. There are people who are poor because they do not have opportunity. I did not find those types of people in Canada because here, opportunities are abound. Then there are people who are poor because of their own habits. I have friends (mid 20's) who are up to their eyeballs in debt yet live like kings because 'YOLO'. People leasing luxury cars, wearing overpriced designer clothes, blowing away cash on parties. You try helping them but they do not want your help. I am sure when the balloon pops and reality hits, it will hit hard. I don't want to be responsible for their reckless decisions in life and be forced to pay into funding their retirement. I will welcome any vehicle which encourages saving and not get punished for it punitively for being more productive.


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## uptoolate

andrewf said:


> These discussions make me wonder what people are willing to do to cut their tax burden. These are, I'm guessing, the people who are perfectly content to let poor people die due to lack of health care, since it might impact their ability to buy a larger vacation property in retirement.


Hopefully it's not that bad. This is still Canada and I'm quite content to have people call me a socialist. I'm pretty sure that many of the countries with the highest satisfaction indexes would qualify as 'socialist'.


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## none

^ That's true.

Pure capitalism is the same as communism in that it's a terrible way to run a country. Of course, people love social policies (such as health care) when they extract more benefit from it than they pay (see hypocrisy up-thread).


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## tenoclock

Industries which are purely capitalistic (the tech industry comes to mind which has no to very little regulation and free markets) has created wealth for hundreds of millions if not billions of people around the world. Compare that with anything run by the government and you will simply find stagnation in government run industries. Socialism is a philosophy of failure and it only creates poverty and misery for the masses.


----------



## Chris L

Socialism fails because it can't operate on an individual level as required by nature. One unit, one beneficiary. If you could legislate collective happiness and well-being, you'd have a shot. But I'm not terribly happy when someone else has an orgasm or wins the lottery. Good for them, I guess. Likewise, I can't legislate that people do what is best for them individually in the LONG term - so they can live in the moment, and I can plan for the future and we can both see where we end up with our own personal freedoms. With freedom comes the right to be rich or poor. But if the government many...so take option B and use your TFSA to fund the poor. See if I care - it'll be your money, and you can choose what you think is best.


----------



## none

Wow, you guys really don't know what socialism is do you?

This is hilarious.


----------



## sags

It seems lost in the discussion, that the government will have to borrow the money to make up for any lost revenue, from any of their recent announcements.

They don't have the money today and won't have it next year or beyond.

The tax burden isn't being lowered. It is merely being shuffled from today to some generation in the future.


----------



## sags

I might also point out that when a government makes decisions, it often involves making choices between different options.

The option they choose pushes the other options to the side.........even if they are better options.

The TFSA is a clear example of a tool the Harper government has decided to use to further entrench their "provide your own" retirement philosophy. 

They could have chosen enhancement of the CPP as was recommended by many pension experts, but that wouldn't affirm their political philosophy.

If the goal is guaranteed retirement income, the TFSA is a poor substitute for a real solution.

As the government MPs (the ones who vote for these measures) are in receipt of their own DB pension plans, it becomes a case of "Do as I say and not as I do".


----------



## none

sags nailed it - the money will just come from elsewhere.

Here are my suggestions (in no particular order):
1) Make real estate gains/loses taxable as gains;
2) Reduce military spending;
3) Make more roads/highways toll roads;
4) Start OAS & CPP clawbacks at 42K rather than 72K.
5) Increase GST by absolute 2%


----------



## Davis

none said:


> Wow, you guys really don't know what socialism is do you?
> 
> This is hilarious.


None, isn't it obvious that anyone who disagrees with a poster here is a socialist (unless they're a Nazi)? It's much easier to demonize someone else's views than to construct coherent arguments and provide evidence.


----------



## none

In many ways this is just pinching pennies.

For example, I have 40K in my TFSA - assume I make 7% per year, that's a $2800 gain.

I'm in about a 30% tax bracket so I'd have to pay $420 a year in taxes.

Anyway, if we're just looking at $5500 - that's only saving 5500*.07*.15 = $58. Big deal. In comparison I save thousands indexing over higher MER mutal funds.


----------



## tenoclock

If what you are saving in taxes is 'not a big deal' - why is it a big deal when the government is not collecting that?


----------



## none

That was the point.

Of course there's a difference at the scale of individual compared to the nation.


----------



## tenoclock

As per your very calculation and claims that this is for the rich, the government is only giving up 58 million dollars a year (assuming an additional 1 million rich people maximize their additional contribution room). The government spent 275 BILLION in 2013 alone. 

This is peanuts compared to what the government spends.


----------



## none

I don't see your point - yes, the 58 million is largely going to people who will hardly notice it.

It is in the grand scheme of things a relatively small amount (now) but it is projected to grow to tax base damaging levels. Again, I don't see your point.

Hey, I'm one of those people who will benefit from it. My TFSA is maxed, my RRSP is maxed AND I get a sweet pension. This is a win for me - that doesn't mean I think it's fair. I'll use it like anyone else (like RESPs) but I still think it's bad national fiscal policy. Like the GST cut, I'm not going to mail in an additional 2% on all my purchased but cutting it was stupid.


----------



## Guban

none said:


> sags nailed it - the money will just come from elsewhere.
> 
> Here are my suggestions (in no particular order):
> 1) Make real estate gains/loses taxable as gains;
> 2) Reduce military spending;
> 3) Make more roads/highways toll roads;
> 4) Start OAS & CPP clawbacks at 42K rather than 72K.
> 5) Increase GST by absolute 2%


1) Do you mean taxing principal residences? Or changing capital gains to normal income? The former would be a real pain as we would have to keep records of any home improvements as that would change our ACB's, open the mortgage deduction debate. 
4) CPP is not clawed back.

I will point out that we could get more money out of savings, like you indicated for 2). We could spend less.


----------



## Chris L

tenoclock said:


> As per your very calculation and claims that this is for the rich, the government is only giving up 58 million dollars a year (assuming an additional 1 million rich people maximize their additional contribution room). The government spent 275 BILLION in 2013 alone.
> 
> This is peanuts compared to what the government spends.


Exactly, but people hate rich people and any tool that might help the middle class become financially self sufficient at the perceive cost to the "poor."

That we have any wealthy people is a testament to our freedom. Stop hating on the rich. Being rich is an option at least.


----------



## pwm

I think it's more the fact that many people have a deep seated almost visceral hatred of the Conservative party and Steven Harper in particular, so any policy they come up with has to be bad. 

Here's a suggestion for all you CPC haters: In the next federal election 50% of you please vote NDP and the other 50% vote Liberal. That way, the Conservatives can get back in with a majority with only 40% of the popular vote, like Cretin did 3 times.

Thanks in advance.


----------



## Davis

Pretty well all Canadians see themselves as being middle class, but the middle class isn't who will benefit from an increase to TFSA limits. Someone who can max their RRSP/RPP contribution AND contribute $11,000 a year to a TFSA simply isn't a middle-income earner. That would be a high-income earner who doesn't realize they aren't middle class.


----------



## Eclectic12

Chris L said:


> ... The wealthy could care less about $5500 or $11,000 a year in sheltered income. It takes a lifetime for the allotment to accumulate to something significant.


Odd ... the article talking about the changed penalties for the TFSA indicated that the advisors noted that the 1% penalty was peanuts to pay to end up with six figure TFSAs in 2009, after paying the penality. I wondered in the TFSA thread about how many could have taken advantage of the loophole or done well with investing ... a poster said they worked in the financial industry where they were able to see multiple million dollar TFSAs.




Chris L said:


> ... $11,000 x 30 years x 0.03% (withdrawal) = $9,900 sheltered from taxes. Plus compounding (3x or 4x or ?). Big whoop to someone earning over $150k/year.


Interesting that the risk would put up with such crap advisors compared compared to the ones here on CMF with north of $60K TFSAs (I seem to be recall the top one being around $100K). The 2009 timing did well for mine.




Chris L said:


> ... The TFSA in and of itself is a boon to the middle class ...


then in post # 85 


Chris L said:


> ... the middle class isn't who will benefit from an increase to TFSA limits.


Interesting point of view ... the rich don't care as they see it as peanuts ... the middle class may or may not benefit ... the low income earners don't use it.

If true ... I'm surprised the financial institutions are willing to do the paperwork, computer systems updates and reporting for something so useless.




Chris L said:


> ... P.S. If things get really bad in Canada, I'll move!


Just make sure you do your homework as I've read many articles as well as had relatives become entranced by published lower tax rates before moving but then after moving discovered that the extras all end up being close or more than what they were paying Canada.

[My relative lasted all of nine months.]

To be clear ... I'm not trashing any country or anyone or pushing anyone to stay/go ... reporting what I've observed over the years.




Chris L said:


> ... This is becoming absurd ... Stop handicapping people who are trying to get ahead.


You really think the PMO is reading this thread and is going to can the TFSA based on it? 
As I understand it, it will come down to votes so I'm not sure why you appear to be letting it get to you.




Chris L said:


> ... Totally absurd. You're asking the government to tax you more!?! Are you off your rockers?


Is it any worse than expecting the next generation(s) to pay what's owed?


Cheers


----------



## none

pwm said:


> I think it's more the fact that many people have a deep seated almost visceral hatred of the Conservative party and Steven Harper in particular, so any policy they come up with has to be bad.
> 
> Here's a suggestion for all you CPC haters: In the next federal election 50% of you please vote NDP and the other 50% vote Liberal. That way, the Conservatives can get back in with a majority with only 40% of the popular vote, like Cretin did 3 times.
> 
> Thanks in advance.


No, conservatives are just math challenged and only look at short term policies. For those interested in improving the country and the economy over the long term, the conservatives just suck.

Harpers greatest achievement was uniting the right - he's a great politician and I agree the liberals benefited from right vote split for a long time. It doesn't make it right or fair and politics should be about fairness. That's why this first past the post system doesn't work well for a >2 party system.


----------



## My Own Advisor

I think every politician only looks at short term policies. Our political system is rigged this way, the focus is on keeping your job.


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## none

That's pretty cynical and I like to imagine and hope it's not true. If that were true then we wouldn't have socialized medicine, charter of rights and freedoms, SARA (which needs to be better), OAS (even though it's pretty lame), RRSPs etc.


----------



## Chris L

The Conservatives are not on the right anymore. You gonna vote for Trudeau? That should work out.


----------



## none

Chris L said:


> The Conservatives are not on the right anymore. You gonna vote for Trudeau? That should work out.


i have to. Not really any other choice.


----------



## Chris L

Because Trudeau has a sense about economics? What's he got up his sleeve to balance the budget? Increase taxes...but we like that sort of thing.

TFSA will not cost the government what people assume they will. Most don't use them at all, or jam the money into a HISA at the rate of inflation. - then pull them out to buy overpriced real estate, cars and other liabilities and consumption.


----------



## none

Harper does? He has what a 4 year bachelor degree in it? Wow, what cred! His party has demonstrated numerous times their lack of mathematical ability. Taxes serve a purpose. Would I vote to have taxes abolished? That would be national suicide.

I agree with the assessments of future TFSA costs. I think their methodology was sound and reasonable.

http://www.theglobeandmail.com/glob...-the-tfsa-contribution-limit/article23207258/


----------



## Chris L

The age group most likely to maximize their TFSA is 55-64 at a whopping 24.9%. lol Raise that to 11k and it's gonna drop to 12.5%. Haha.

Oh no, the boogeyman is coming.

http://www.theglobeandmail.com/glob...it-means-for-your-retirement/article23828722/

People are confusing two things. They say... 1) This will only benefit the rich because they are the only ones who can maximize it and 2) This is therefore a problem because it's going to cost tax revenue.

#1 is not relevant. The rich benefit from having money, period. They can shelter it in any number of ways and #2 is just a non issue because "the only ones to benefit from the increase are the rich" (which prevents it from getting out of hand).

So get your facts straight and tell me why this is a bad idea rather than make it to be a boogeyman.

In reality this is a tool for ultra savers who wish to achieve financial independence in a slow and methodical way. Someone who can sock away 1k a month steadily is going to come out the winner. And you don't have to be rich to do that. Not at all. You need to rent and live below your means.


----------



## none

You are undermining your point (s).

The point in that #1 - the 'rich' will use this and hardly notice and therefore offers little benefit; 2) It erodes the tax base. yes, that's a problem.

So what are you trying to say? are you anti TFSA now? because you just made a pretty good argument against them.


----------



## Chris L

No, I'm saying:

"In reality this is a tool for ultra savers who wish to achieve financial independence in a slow and methodical way. Someone who can sock away 1k a month steadily is going to come out the winner. And you don't have to be rich to do that. Not at all. You need to rent and live below your means. "

The other argument cancel themselves out.


----------



## none

You do realize that average before tax income for single people in Canada is about $33,00 right? (a bit of extrapolation on my part there)

source: http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil21a-eng.htm

Tax rate in about 20% in BC
source: http://www.taxtips.ca/taxrates/bc.htm

So about 26,000 after taxes.

Rent, food, car, gas, heating,clothes etc - what? $2000 a month? (lets ignore any kids, savings ect - we're up to 24K after tax leaving a paltry 2K to sock into a TFSA.

Your math doesn't add up.


----------



## Chris L

If I was rich, I'd have a million in div paying Canadian companies and pull $50k tax free. Then I'd have a corp and pay my kids a salary. So....why tackle TFSA's which will never be maximized. People are up to their eyeballs in debt. Why? How is the government gonna help them with that? 

Maybe we should make maximum contributions to a TFSA MANDATORY. Now we're on to something. Then in retirement you have a million guaranteed and spin off $50k in income tax free. Legislate it. If you can't pay it, you can't qualify for a mortgage load (gotta rent). Can't rent because you can't meet your lawful obligation to max your TFSA, live with mom and dad. Let's get working on saving the poor ASAP.


----------



## Chris L

none said:


> You do realize that average before tax income for single people in Canada is about $33,00 right? (a bit of extrapolation on my part there)
> 
> source: http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil21a-eng.htm
> 
> Tax rate in about 20% in BC
> source: http://www.taxtips.ca/taxrates/bc.htm
> 
> So about 26,000 after taxes.
> 
> Rent, food, car, gas, heating,clothes etc - what? $2000 a month? (lets ignore any kids, savings ect - we're up to 24K after tax leaving a paltry 2K to sock into a TFSA.
> 
> Your math doesn't add up.



You can't be an ultra saver (like me) if you do average things.


----------



## andrewf

As I have said previously, people on this forum are totally divorced from reality when they complain about the burden they feel as 'middle class' taxpayers, earning $100k salaries... It's really quite astonishing the bubble people live in.


----------



## andrewf

Chris L said:


> If I was rich, I'd have a million in div paying Canadian companies and pull $50k tax free. Then I'd have a corp and pay my kids a salary. So....why tackle TFSA's which will never be maximized. People are up to their eyeballs in debt. Why? How is the government gonna help them with that?
> 
> Maybe we should make maximum contributions to a TFSA MANDATORY. Now we're on to something. Then in retirement you have a million guaranteed and spin off $50k in income tax free. Legislate it. If you can't pay it, you can't qualify for a mortgage load (gotta rent). Can't rent because you can't meet your lawful obligation to max your TFSA, live with mom and dad. Let's get working on saving the poor ASAP.


So you are in favour of expanding CPP? Mandatory retirement savings?


----------



## none

^ I know right? What I find most shocking is people can't even imagine that their world view may be a poor model of reality.


----------



## none

andrewf said:


> So you are in favour of expanding CPP? Mandatory retirement savings?


I actually think that's a pretty good idea.


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## OurBigFatWallet

I can see this as being contingent on getting elected again - which may not happen. I only say this because of the timing of the announcement with an election coming up soon


----------



## Chris L

andrewf said:


> So you are in favour of expanding CPP? Mandatory retirement savings?


No, I was being sarcastic. I think people should be free to be poor or wealthy. Some people are happy to live in the moment from hand to mouth. We need to strop trying to save people who don't want to be saved.


----------



## andrewf

So you think we should be abolishing OAS/GIS?


----------



## Chris L

andrewf said:


> So you think we should be abolishing OAS/GIS?


No, I think we should boost TFSA's limit. That way people can rely on their own means of funding their retirement.


----------



## andrewf

Surely, eliminating welfare for old people is in the same vein of encouraging people to fund their own retirement.


----------



## GoldStone

Conservatives are math challenged but Liberals are not? That's hilarious.

Ontario Liberals have been in power since 2003. Ontario is swimming in deficits and debt. Interest on debt consumes 10% of tax revenue, with interest rates at historic lows! It's #3 budget expenditure, soon to become #2, ahead of education.

Liberal math wizards should be raising taxes in Ontario. But no, they don't have the courage. CMF pro-tax lobby... where is your outrage against your own party???


----------



## Chris L

andrewf said:


> Surely, eliminating welfare for old people is in the same vein of encouraging people to fund their own retirement.


In a different world, yes, it would.

Unfortunately, most people are shortsighted.

Welfare is a safety net for the inevitable majority of the grasshoppers so they don't starve to death after living in the moment for their entire lives. 

Ants need tools too. Stop raiding my stash! (give me my TFSA and higher limits)

Ants should be able to become self sufficient and wealthy, the grasshoppers should be offered a pittance in their old age. If that's not incentive enough, then so be it. That's all a healthy society is required to do.

I'm not totally against helping other people and taxes, but things should not be 'equal' and there should be no war on the freedom to become wealthy.

Part of living in a free world, is the freedom to have unequal access to resources.


----------



## humble_pie

andrewf said:


> So you are in favour of expanding CPP? Mandatory retirement savings?



not an ontario liberal here but i'm in favour of mandatory retirement savings. 

i'm also in favour of family benefits, moderate TFSAs, maybe a lifetime 100k cap on TFSA contributions only, maybe not double with flashy publicity to 11k in order to cater to drooling voters, possibly with intent to rescind or claw back later ...

i adore reading some of Chris L's comments on aging destitute seniors, next thing there's always setting em adrift on icebergs, thank you indeedy for the laff


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## lonewolf

The Conservatives wanted to change the banking rules to similar in the United States just before the market tanked going into 2008/09 so the banks could be more leveraged, Luckily the other parties stopped them, for the Canadian banks still had to be bailed out according to some sources. I think the main reason to increase the TFSA limit is for the banks to get their hands on more money.


----------



## Eclectic12

Chris L said:


> ... TFSA will not cost the government what people assume they will. Most don't use them at all, or jam the money into a HISA at the rate of inflation. - then pull them out to buy overpriced real estate, cars and other liabilities and consumption.


True ... but if it's so cheap - why did the gov't scramble in 2009 to beef up the penalties? 
The announcement that legislation was coming to add new penalties included that the penalties would take start the day the announcement was made and not when the legislation was passed.

If you feel that this was one exception ... why is CRA going after TFSA holders who have large TFSAs who have been actively trading?
http://business.financialpost.com/p...r-tfsa-being-targetted-by-cra?__lsa=6efd-9a20


After all ... few are using (or abusing) the TFSA, right?


Cheers


*PS*

Bottom line for me is that I believe the costs for the TFSA are somewhere between the extremes being tossed around here.


----------



## kcowan

andrewf said:


> These discussions make me wonder what people are willing to do to cut their tax burden. These are, I'm guessing, the people who are perfectly content to let poor people die due to lack of health care, since it might impact their ability to buy a larger vacation property in retirement.


There are many of us how downsize in retirement to improve our ability to support charities. Granted on brush never covers all.


----------



## hboy43

Hi:

Ah, great fun ... Conservatives bashing Liberals, and Liberals bashing Conservatives. I know it all and the "other" is an idiot.

Now, I have my views on things and know how I would run the country if I had the power, but the reality is that I am one against 33 million. I have zero say on how Canada unfolds. Everyone has zero say, though most won't admit it. All anyone has is the ability to suggest, either by doing something like debating here or casting that one lonely vote.

We get what we get. All I can do is adapt to the reality.

What is the reality of the TFSA for me? It is pretty inconsequential. I have not yet even used all the TFSA room available, though I am real close now. The reality is that I have been so busy exploiting other things, like declining to work at a job and pay 50% MTR, chasing dividends and capital gains and eschewing FI (again 50% MTR), and leveraging (writing off the cost of the interest), that I did not have enough "clean" money to fund it right away. By "clean" I mean free of tax, attribution, and leverage issues, or at least being sufficiently easy to sort out. So I plugged away at it over the years and am almost caught up. So will I use a greater limit? Sure. Will it be material? No.

The reality is that my family pays more in tax in a year than all other spending combined. Likely yours does too, given the sorts that hang out here on a money forum, you know people with money. Do I think much of my taxes is wasted? Sure do. Do I think society would be collectively better off with less tax and less government? Absolutely! Do I think more "poor" and others would end up dead sooner? Yes I do, but I consider that an acceptable cost of having more freedom. But more importantly, I think it leads to more not-working-at-a-job-life-years, where you can spend more time doing what you want, that is being free, even though you statistically might be dead a year or three sooner. 

Consider the recent story that the last year of life costs on average $54,000 in medical expenses. How many years sooner could you retire if you did not have to pay this bill? One, Two? Even at 0.5:1 I'd agree to die a year sooner, a year of ill health, to spend another half year in my healthy youth doing what I want. Likely even 0.25:1 works. Of course there is no way to make this happen in reality, but the theory is sound.

Most will choose trying to save everyone and live every last possible miserable minute of that last year of ill health, and take the resulting tax slavery willingly. Your type clearly have won and I accept my defeat. I now return to my attentions to working with this reality ...

hboy43


----------



## Chris L

Eclectic12 said:


> True ... but if it's so cheap - why did the gov't scramble in 2009 to beef up the penalties?
> The announcement that legislation was coming to add new penalties included that the penalties would take start the day the announcement was made and not when the legislation was passed.
> 
> If you feel that this was one exception ... why is CRA going after TFSA holders who have large TFSAs who have been actively trading?
> http://business.financialpost.com/p...r-tfsa-being-targetted-by-cra?__lsa=6efd-9a20
> 
> After all ... few are using (or abusing) the TFSA, right?


That's right. Did you not read the stats? The most who use it are around 25% maxed. Most have their money stuffed into a HISA. Why do you think it's a big problem when a few used a loophole?

Boomers had a great shot at building wealth and many did, some wasted it. I know both kinds. The same opportunity to fail and succeed should be offered to the next generation. 

Do people not understand that you can't get ride of poverty? That if we permit freedom, some will make decisions that lead to such ends? We can't save everybody. In a different world we'd have people set aside 20% of their salary by law. But that's not freedom. And not everyone would choose to afford that either. Borrow and spend, buy toys, big houses, two cars, take expensive vacations and shop for sport. Someone who has no money and lives in Canada has made decisions toward that end. Who am I to decide what's best for them? Everyone is as happy as they ever will be. You can't game happiness and I can't create lasting happiness for another person. Live free or die.

Edit: I looked at a house for sale 3 days ago. Was listed for $400k and needed about $75k in renos to bring it to current standards ($5000 prop taxes). I was prepared to offer $350k but the agent said it would go for over list price so I didn't bother. She was right. It sold for $420k in 2 days. I could have shoved all my chips in, but didn't. But someone else didn't. They'll have to live with the outcome of that decision.


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## none

At the very least Canada should institute an estate tax to compensate for the TFSA expansion.


----------



## peterk

Interesting thread. I have no idea what kind of Canadian politics I have then...


I think the TFSA expansion is great, and that in general, gains or distributions shouldn't be taxed at all. (Already taxed from your income in the first place, and income from the company you've invested in is also taxed)

I do think that income generated from the TFSA should be included in your income for the purposes of calculating benefits from the government.

I think it's a great idea to expand CPP and force people to save more for themselves through the government.

I think old people who are very low income <15k should get more OAS and GIS, I think old people who make >30k should get no OAS or GIS at all (maybe 40k for couples)

I think having a small estate tax (<15%) on assets over 2M would be an excellent idea, and not discourage anyone from working hard, nor deprive inheritors very much of their substantial inheritance. 


What kind of Canadian does that make me?? :biggrin:


----------



## tenoclock

none said:


> At the very least Canada should institute an estate tax to compensate for the TFSA expansion.


Estate tax is nothing but grave robbery.
Since now that we have moved to punitive taxation, why not also a bedroom tax? Why not put a sales tax of 35% on all luxury goods? Maybe tax McDonalds more than McSalad? Where do we stop taxing? 

And then people get outraged at the wealthy with offshore bank accounts and properties?


----------



## humble_pie

peterk said:


> I think ... What kind of Canadian does that make me?? :biggrin:



a wise canadian. Not too big. Not too small. Not too red. Not too blue. Just right. Check, check, check.


----------



## none

tenoclock said:


> Estate tax is nothing but grave robbery.
> Since now that we have moved to punitive taxation, why not also a bedroom tax?



A bedroom tax? That would send me to the poor house!


__
Sensitive content, not recommended for those under 18
Show Content


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## Chris L

How would the government know what's up in your bedroom? Oh yeah, the daylight tax: http://en.wikipedia.org/wiki/Window_tax

Seriously, whenever you do anything, the government takes a cut. It certainly can't be that expensive to run necessary establishments.

Reports from my sis-in-law is that those guys in the big blue government building in my city do jack squat. But at least they're 'employed' and 'productive' to supply us with valued services.


----------



## Mortgage u/w

Best tax shelter ever: Cash in you mattress!!


----------



## Eclectic12

Chris L said:


> Eclectic12 said:
> 
> 
> 
> After all ... few are using (or abusing) the TFSA, right?
> 
> 
> 
> That's right ... Why do you think it's a big problem when a few used a loophole?
Click to expand...

The first clue is that the gov't usually takes more than ten months to make changes to something that just came into effect. Bear in mind that the letters for TFSA over-contribution penalties were not sent until something like six months after the changes were announced. This suggests strongly to me that the trigger was *big* as well as an *obvious* tax revenue loss.

The second clue is that one of several changes was designed to ensure that withdrawals of deliberate TFSA over contributions do not create additional TFSA contribution room when the withdrawn.

The example I recall used in the article was that one would over-contribute $100K, withdraw the excess $95K and pay the $950 penalty. The following year when everyone else had $10K of total TFSA room granted, the person doing this would have the $10K plus the withdrawal amount of $95K for a total of $105K. What happens overall from a gov't tax revenue perspective is they gained $950 of revenue for one year but have lost revenue for $95K (the equivalent of nineteen people being granted TFSA contribution room).

If people were doing this with as little as $100K ... what did people like say the Canadian bank CEO's who were paid anywhere from $5.7 million to $10.4 million in 2009 do? It seems to me that it would appealing to pay $10K to create $1 million of TFSA contribution room. 

The figure of $100K strikes me as a nice safe number that illustrates why the change had to be made in a hurry but did not embarrass the gov't by publishing the much larger numbers of what those with the means were actually doing that had come to their attention.


Bear in mind that this is one of several abuses so there's lots of room for the other types to be adding to the lost gov't tax revenue.


Cheers


----------



## slinger

peterk said:


> Interesting thread. I have no idea what kind of Canadian politics I have then...
> 
> 
> I think the TFSA expansion is great, and that in general, gains or distributions shouldn't be taxed at all. (Already taxed from your income in the first place, and income from the company you've invested in is also taxed)
> 
> I do think that income generated from the TFSA should be included in your income for the purposes of calculating benefits from the government.
> 
> I think it's a great idea to expand CPP and force people to save more for themselves through the government.
> 
> I think old people who are very low income <15k should get more OAS and GIS, I think old people who make >30k should get no OAS or GIS at all (maybe 40k for couples)
> 
> I think having a small estate tax (<15%) on assets over 2M would be an excellent idea, and not discourage anyone from working hard, nor deprive inheritors very much of their substantial inheritance.
> 
> 
> What kind of Canadian does that make me?? :biggrin:


A socialist! Better hop on the orange bandwagon  Cutting OAS and GIS for higher income individuals goes against the mere basics of Canadian capitalism. It reduces incentive for individuals to become educated and get a higher paying job and from working hard to earn a higher income. That would just be another handout and reward for laziness. Is that the message you want our country sending to the public?


----------



## none

You imply that hard work and education are directly related to monetary compensation. As someone with a PhD and who makes less than a plumber I would disagree with that assessment.


----------



## Guban

slinger said:


> A socialist! Better hop on the orange bandwagon  Cutting OAS and GIS for higher income individuals goes against the mere basics of Canadian capitalism. It reduces incentive for individuals to become educated and get a higher paying job and from working hard to earn a higher income. That would just be another handout and reward for laziness. Is that the message you want our country sending to the public?


GIS is already cut for people with a higher income. OAS can be clawed back too. Income taxes are "progressive". I guess we are already sending that message, now we are discussing the volume of that message.


----------



## Chris L

none said:


> You imply that hard work and education are directly related to monetary compensation. As someone with a PhD and who makes less than a plumber I would disagree with that assessment.


Who's implying this? You got a bad education if you think book smarts means higher income.


----------



## Eclectic12

^^^^

YMMV ... education is a factor which may or may not be relevant. Even where it is relevant, it may be opening the door where supply/demand is setting the income level. 

For a long time, the insurance company I used to work at would hire computer operators with high school diplomas. The manager commented one day that to keep the pile of applications reasonable for him to review, he was tossing any applications that did not have a university degree. When I checked, it was something like fifteen years of only university grads he was hiring. With the comments about how difficult it is to get a job, I have no reason to believe it's changed but have not checked.


Cheers


----------



## none

Chris L said:


> Who's implying this? You got a bad education if you think book smarts means higher income.


Slinger. Post above mine. Yes, there's a loose relationship. For example, Fort Mac grease monkey's get paid huge (or used to). Of course my job is far more fun than grease monkeying - that's certainly a perk


----------



## tenoclock

Income levels are solely determined by supply and demand, unless you are in the government.

When everyone has a PhD and considers plumbing work beneath themselves, plumbers will be the ones who will make the most dough. People in Fort Mac are making more because they are sacrificing living in the cosy city near family and friends - something not everyone is willing to do.


----------



## none

So politicians get paid so much because they're so highly in demand? 

But seriously, there is the package thing. I think plumbers are underpaid for how 'crappy' their job are. Sure, I'd like to get paid more but my job is pretty fun so I'm willing to take the financial hit. It pays enough and that's the important thing. I can easily make more through consulting work whenever I choose to.


----------



## tenoclock

none said:


> So politicians get paid so much because they're so highly in demand?
> 
> But seriously, there is the package thing. I think plumbers are underpaid for how 'crappy' their job are. Sure, I'd like to get paid more but my job is pretty fun so I'm willing to take the financial hit. It pays enough and that's the important thing. I can easily make more through consulting work whenever I choose to.


As I said, the government is excepted because the government does not play by the market. The government tries to interfere with the market. This is why government employees get higher pay for doing less and low quality work, not to forget the guaranteed pensions. 

If you can easily make more than a plumber but chose not to, then that's your choice. You cannot use that as an example of highly educated people being paid low.. 

It is still true that the more education you have, you generally make more money because you are creating more value for others.


----------



## none

See this part isn't true. Government employees (at least higher level ones) actually get paid less than they could in the private sector.


----------



## tenoclock

none said:


> See this part isn't true. Government employees (at least higher level ones) actually get paid less than they could in the private sector.


So why are they working for the government?


----------



## peterk

The only bad things about working in Fort Mac are the remote location and the cold/dark winter. The actual work is awesome for a young man and I would highly recommend it over most city jobs. Job for job, comparing fort mac to any other normal city you get: Higher compensation, faster career/responsibility progression, less manager oversight, higher safety standards, more lax dress code, less bureaucracy, less political correctness.

I work in a department of almost exclusively engineers, and we are about as "professional" as it gets up here. There is no dress codes, wear whatever you want. Suit and tie (uncommon) down to sweats and sneakers (more common, too common). Don't have to shave every day, half the men have beards. Someone brings up bad news in a meeting you can say "that's fucking retarded" and no one will bat an eye. Last week someone was describing a pump that was frozen out in the ice and said it was still "cock hard". What a good time it is.

If your idea of a good job is sitting in an office for 50 hours a week and being paid for 40, having to be professional and watch what you say at all times, shaving every morning and putting on expensive clothes you don't like, complaining about how you should be making more money because of your advanced degrees, attending endless bullshit meetings, or being compensated for your hard work and experience with profession respect from a handful of co-worker and a false sense of superiority _instead of more money_.... Then Fort Mac may not be for you.


----------



## none

tenoclock said:


> So why are they working for the government?


because my job is super fun, I manage my own time and I make enough. I do consulting on the side to bump up my salary anyway. Life is more than just making money.


----------



## tenoclock

none said:


> because my job is super fun, I manage my own time and I make enough. I do consulting on the side to bump up my salary anyway. Life is more than just making money.


So how can anyone say that government workers are making less or are in an unfavorable position - when they are working less, have bigger pensions, more vacation, ultimate job security, and super fun jobs.

If you cannot get such a job in the private sector in an open market, that simply means that you are already getting more than you deserve!


----------



## edarte

Chris L said:


> That's right. Did you not read the stats? The most who use it are around 25% maxed. Most have their money stuffed into a HISA. Why do you think it's a big problem when a few used a loophole?
> 
> Boomers had a great shot at building wealth and many did, some wasted it. I know both kinds. The same opportunity to fail and succeed should be offered to the next generation.
> 
> Do people not understand that you can't get ride of poverty? That if we permit freedom, some will make decisions that lead to such ends? We can't save everybody. In a different world we'd have people set aside 20% of their salary by law. But that's not freedom. And not everyone would choose to afford that either. Borrow and spend, buy toys, big houses, two cars, take expensive vacations and shop for sport. Someone who has no money and lives in Canada has made decisions toward that end. Who am I to decide what's best for them? Everyone is as happy as they ever will be. You can't game happiness and I can't create lasting happiness for another person. Live free or die.
> 
> Edit: I looked at a house for sale 3 days ago. Was listed for $400k and needed about $75k in renos to bring it to current standards ($5000 prop taxes). I was prepared to offer $350k but the agent said it would go for over list price so I didn't bother. She was right. It sold for $420k in 2 days. I could have shoved all my chips in, but didn't. But someone else didn't. They'll have to live with the outcome of that decision.



I just had to jump in here because Chris L just seems so pleased with himself. He ( I am assuming male) makes all the right decisions and is saving a pile of money and anyone who is not saving is a fool.

The reality is life is a crap-shoot. Sure you can save, if you have money left over after you feed yourself. But many people are just getting by - next time you are in a restaurant ask the server how much they are saving in their TFSA and will they be able to bump it up to 11,000 every year?

I have just retired and have saved most of my life and I have lucked out. But without luck, even when working and saving hard, many people don't do so well. Either because of bad health, working in an industry that has no future, divorce, bad investment decisions, etc. etc. Just don't be so simpleminded and smug Chris L.

As for the real estate decision you criticize - back in 1989 my wife and I sunk all our money into a house in Toronto. Then real estate took a nose dive and the house did not come back to its purchase price until 2002 and we eventually sold it in 2007 for more than double. At various points along the way we would have looked stupid or smart. Life is not so straightforward.

I would benefit from an increased TFSA limit and would/could take advantage of it if available but I will not vote Conservative to get it because I don't agree with their principles and I do think it is being offered to buy the votes of seniors.


----------



## none

^ Exactly. Chris L. had a hard time seeing beyond his own self interest. I'm one of those that will benefit most from the TFSA, maxed out RRSP, maxed out TFSA, Big pension coming in. Sure I'll use the extra room because I run my life as an individual but I vote with my country men and women in mind. Increasing TFSAs is bad policy for the nation. Full stop.


----------



## OnlyMyOpinion

none said:


> ...but I vote with my country men and women in mind.


Please don't do us any favours. 
I'm confused now, if someone has a 'big pension', can afford to max out their RRSP and TSFA, but will still _'use the extra room because I run my life as an individual'_, rather than say, not take advantage of the tax savings - would we not also consider them to _have a hard time seeing beyond their own self interest_ as well?


----------



## none

Well I advocate for non-TFSA expansion. I also think RESPs are stupid at a national level but I use them (and my 4 year old is apparently and investing genius).

I guess I don't really see your point.

Edit: i guess the difference is that although we may live on the same piece of dirt I don't think you and I live in the same country (or at least what we would like our country to be).


----------



## andrewf

OnlyMyOpinion said:


> Please don't do us any favours.
> I'm confused now, if someone has a 'big pension', can afford to max out their RRSP and TSFA, but will still _'use the extra room because I run my life as an individual'_, rather than say, not take advantage of the tax savings - would we not also consider them to _have a hard time seeing beyond their own self interest_ as well?


No. This argument is facile.


----------



## cainvest

If the only difference in voting for one or the other parties was the TFSA increase ... ya, I'll vote for the bigger TFSA. Why? Because I can make use of the increase.


----------



## GoldStone

none, a government worker with a fat guaranteed government pension, argues in favor of higher taxes. LOL. In other news, sun is hot. water is wet.

Paraphrasing Upton Sinclair, it is difficult to get a man to understand something, when his fat government pension depends upon his not understanding it.


----------



## Chris L

none, thanks for perfectly illustrating my point. It's people like you with fat gov. pension that makes people like me. Do us all a favour and put your money where your mouth is. At least I'm honest and consistent.

Not smug, smart, careful, patient, with a low need to purchase canned enjoyment in life. If I'm successful, luck will have nothing to do with it.

I just walked away from a home that I would have enjoyed because some other "unlucky" dope paid 20k over asking. Repeat that scenario 30 times over the year and you too can be "lucky."

The 90's RE bubble is not unlike the one we're in now. I bought in 2001 and 2003. When prices were reasonable. Otherwise I would have rented. Not luck at all.

You guys need to look up Mr. money mustache and stop pretending that your fate is out of your control.


----------



## sags

The Mustache Man..........who doesn't believe in paying for health insurance is one heartbeat away from being poor.


----------



## slinger

none said:


> You imply that hard work and education are directly related to monetary compensation. As someone with a PhD and who makes less than a plumber I would disagree with that assessment.


In general, across a broad domain (ex. a country), YES, post-secondary educated people earn higher incomes than non-post-secondary educated people. That is just a fact. Check out the stats from Stats Can. Is it always the case? Of course not. Yes, there may be plumbers earning more than PhD's in some areas.


----------



## canucked_up

sags said:


> The Mustache Man..........who doesn't believe in paying for health insurance is one heartbeat away from being poor.


I think this is the 2nd time I've seen you state something like this(I couldn't let it slide this time), and you couldn't be more wrong. You should maybe spend some time at his blog and actually get some facts... http://www.mrmoneymustache.com/2012/11/01/our-new-237-per-month-health-insurance-plan/


----------



## slinger

Guban said:


> GIS is already cut for people with a higher income. OAS can be clawed back too. Income taxes are "progressive". I guess we are already sending that message, now we are discussing the volume of that message.


Yes, I know there are clawbacks for higher earners. I was arguing the point that peterk made in which he thinks seniors, or rather 'old people," who earn over 30k annually should receive no GIS or OAS at all. I should've been more clear and specific about that.


----------



## tenoclock

The harder and smarter I work, the luckier I get. 

I wonder why that is..


----------



## protomok

none said:


> I vote with my country men and women in mind. Increasing TFSAs is bad policy for the nation. Full stop.


I also vote with my country in mind and IMHO the best strategy for our country is to reduce the size of our bloated and ineffective government and redirect the money to Canadians in the form of tax cuts. We could debate all day about the most effective form of tax cuts, but the fact remains that only one party appears to be offering _any_ kind of tax cuts.


----------



## Cal

I think with some of the comments here, people are assuming that those that have none, or little money in their later years, are in that situation due to ignorance or poor fiscal discipline. Some choose to spend their retirement money, far prior to retirement, when they are far more mobile and feel they can enjoy it better.


----------



## Xoron

Cal said:


> I think with some of the comments here, people are assuming that those that have none, or little money in their later years, are in that situation due to ignorance or poor fiscal discipline. Some choose to spend their retirement money, far prior to retirement, when they are far more mobile and feel they can enjoy it better.


100% right on. How many people have I heard of that think of their RRSP accounts as just another savings account. Need a new car / want a nice vacation, lets just raid (I mean withdrawl from) our RRSP?

Sometimes you need someone else to make the hard decisions for you. Like CPP Expansion, I'm personally not for it (I save enough now for my retirement), but it's likely something that would be a net benefit to society.


----------



## RCB

Cal said:


> I think with some of the comments here, people are assuming that those that have none, or little money in their later years, are in that situation due to ignorance or poor fiscal discipline. Some choose to spend their retirement money, far prior to retirement, when they are far more mobile and feel they can enjoy it better.


I am one that looks to spending and enjoying prior to 65. At 63 my mother received a terminal cancer diagnosis, and was dead at 64. My father was placed in a nursing home a year later, at 66, with severe dementia. He was toast with my mother's diagnosis, and went downhill very rapidly.

I'll see that expenses will be covered beyond 65, but I'm doing all I want to do (travelling for example) in the next 15 years, leading up to 65.


----------



## gibor365

Good article about doubling TFSA room
http://www.thestar.com/business/per...sa-limit-changes-the-savings-game-mayers.html


----------



## 1980z28

I am in this group Max it all

If you’re 55+: Older workers have taken to TFSAs in a big way, because it’s something they haven’t had for most of their working life. The finance department says 71 per cent of Canadians maxing out their TFSAs are over 55. The CRA says the age group with the most accounts is over 75.


----------



## gibor365

1980z28 said:


> I am in this group Max it all


We're also maxing both RRSP and TFSA even though we're below 50 y.o.


----------



## Eclectic12

1980z28 said:


> ... If you’re 55+: Older workers have taken to TFSAs in a big way, because it’s something they haven’t had for most of their working life. The finance department says 71 per cent of Canadians maxing out their TFSAs are over 55...


Makes sense as the older folks are more likely to have most $$$ to put into the TFSA, whether from dropping expenses as mortgages are paid off, kids move out and/or growing investment income.


Cheers


----------



## 1980z28

gibor said:


> We're also maxing both RRSP and TFSA even though we're below 50 y.o.


YOU will be rewarded in the end,good work

I gave up a lot to have what I have now

Reward is retirement in two years

Would I do it different now looking back,no,one thing maybe waited for children and marriage fir son at 20 first wife at 20 an a couple months,,,did not plan my personal life as well as my financial life

Just quit my part time job of 7 years today and have taken on another one that is full time,now working 5 days instead of 3,,,,,,wife said I should be working until retirement in 23 months


----------



## none

gibor said:


> Good article about doubling TFSA room
> http://www.thestar.com/business/per...sa-limit-changes-the-savings-game-mayers.html


Bit of a straw man argument here (I don't see how it's relevant):

"I know a lot of people who work hard and have done well. They aren’t rich, but yes they’ll benefit most, because they make more money. They also contribute most through their taxes to social programs many of which they don’t get. Those programs are good, because income equalization makes for a stronger social fabric."


----------



## 1980z28

Eclectic12 said:


> Makes sense as the older folks are more likely to have most $$$ to put into the TFSA, whether from dropping expenses as mortgages are paid off, kids move out and/or growing investment income.
> 
> 
> Cheers


Last mortage was at 34 years old twenty years ago,last kid still at home

You are correct most older persons have extra cash when fridge and stove is paid for


----------



## zaphod

So it looks like the TFSA limit is increase to $10k effective immediately. Does that mean I can transfer another $4500 into my TFSA today (I already did $5500 in January)


----------



## mrPPincer

I'd wait and see, legislation has to be passed, and it's an election year.


----------



## none

Yup - garth says tomorrow. I'm doing it.


----------



## Chris L

"TFSA contribution limits have been doubled, almost. The new number is $10,000, not the eleven grand we figured would be handed to us. But the biggest (and most unexpected) gift comes with the timing – instead of taking effect next January, it became law now. So the 2015 limit is goosed from $5,500 to ten thousand, and to $20,000 for a couple. Yahoo."

According to G. Turner.


----------



## mrPPincer

Garth Turner isn't the CRA, I'll be waiting a bit to be sure.


----------



## none

Every news source I've read says it's effective immediately. Who really cares but I got a nice consulting check this morning that I was going to put in my non-reg account but might as well put $4500 of it into my TFSA so it's maxed.


----------



## mrPPincer

Nice! I'll still be taking the cautious approach tho, wait & see if it's for real, at least for now.


----------



## gibor365

mrPPincer said:


> Garth Turner isn't the CRA, I'll be waiting a bit to be sure.


I want to see it on CRA website.....

For fixed income portion , I may transfer some money from PCF to PT, as I understand that 2.5% in TFSA is better than 2.6% in non-reg


----------



## Synergy

From what I've read, the increase is effective as of January of this year (2015). I'm going to wait until the end of the week just in case...


----------



## gt_23

Eder said:


> It's pretty strange of a government to actually try to carry out it's campaign promises.


Actually the current federal government has fulfilled virtually all of it's commitments from the last election, with the exception of those that the unelected SCC has prevented them from implementing, so I don't find it strange at all from the current gov't.


----------



## humble_pie

Garry Marr - a CA i believe - writes in the finPost that the new $10k limit is retroactive to jan 2015 so he says canadians can go ahead & top up their TFSAs tomorrow if they want.

there's a high probability that marr is right but still i'd want the trustee of the account - the broker - to officially OK the new contribution limit. This might take brokers a couple of days. Might take truly cautious brokers a week.


http://business.financialpost.com/p...-limits-by-82-to-10000-a-year?__lsa=a949-e2b9


----------



## Davis

I am appalled that Garth Turner, a former Minister of Revenue, doesn't know that a budget isn't a law, and that tax changes like these require amendments to be introduced in a budget bill, passed in both houses, and granted royal assent before they become "law". But then, he was a pretty crappy minister. I remember that when he was revenue minister, he said that he wanted to do a full review of the income tax policy, which would be in the purview of the Minister of Finance, not of Revenue. 

CRA likely will not charge overcontribution penalties because the government has proposed the changes in a budget, but if the Tories do not put the amendments in a pre-election bill, you'd be counting on the goodwill of the next government.


----------



## zaphod

True that it isn't law yet but often budget changes take effect immediately. There have been a few instances where new taxes were collected and then the budget bill was defeated- didn't this happen with a gasoline tax with Joe Clark's short lived government in the late 70s?


----------



## gt_23

Davis said:


> I am appalled that Garth Turner, a former Minister of Revenue, doesn't know that a budget isn't a law, and that tax changes like these require amendments to be introduced in a budget bill, passed in both houses, and granted royal assent before they become "law". But then, he was a pretty crappy minister. I remember that when he was revenue minister, he said that he wanted to do a full review of the income tax policy, which would be in the purview of the Minister of Finance, not of Revenue.
> 
> CRA likely will not charge overcontribution penalties because the government has proposed the changes in a budget, but if the Tories do not put the amendments in a pre-election bill, you'd be counting on the goodwill of the next government.


It's as good as done....Conservatives have a majority and budget will get passed before the next election. Who cares about Garth Turner, he hasn't been an MP for a long time.


----------



## OnlyMyOpinion

Davis said:


> I am appalled that Garth Turner, a former Minister of Revenue, doesn't know that a budget isn't a law, and that tax changes like these require amendments to be introduced in a budget bill, passed in both houses, and granted royal assent before they become "law". But then, he was a pretty crappy minister. I remember that when he was revenue minister, he said that he wanted to do a full review of the income tax policy, which would be in the purview of the Minister of Finance, not of Revenue.


He was Minister for just over four months, just enough time to get new business cards printed and update his resume. Crediting him any experience or qualifications based on his tenure would be a BIG stretch.


----------



## MrMatt

Davis said:


> I am appalled that Garth Turner, a former Minister of Revenue, doesn't know that a budget isn't a law, and that tax changes like these require amendments to be introduced in a budget bill, passed in both houses, and granted royal assent before they become "law". But then, he was a pretty crappy minister. I remember that when he was revenue minister, he said that he wanted to do a full review of the income tax policy, which would be in the purview of the Minister of Finance, not of Revenue.
> 
> CRA likely will not charge overcontribution penalties because the government has proposed the changes in a budget, but if the Tories do not put the amendments in a pre-election bill, you'd be counting on the goodwill of the next government.


They know, they're just grandstanding.

Realistically some changes are just regulations, some are laws, but the reality is it makes sense for CRA to proceed as if they're already law. I think that these changes shouldn't be active until 2016, but being retroactive, the next government will have to actively take away something that's already been granted, which is a tough game to win.


----------



## AltaRed

Apparently there is a Ways and Means Motion that is attached to the budget to bring effect to TFSA and RRIF (and other) changes. I don't know if that means immediately, or the Ways and Means motion must be formally approved. I'm sure the financial institutions will jump on advertising as soon as it is 'effective'.


----------



## andrewf

It needs to be passed by both the House and the Senate and signed by the GG before it becomes law. That should be a formality, as long as they get it done before the election. It would probably need to happen before the summer recess, since I doubt Parliament will reconvene in the Fall prior to the election.


----------



## OnlyMyOpinion

I don't mind admitting that I'm not a politician and I'm not familiar with all of the intricacies of our great institution. It seems like the increase may be effective now. From Financial Procedures - The Business of Ways and Means: _Convention dictates that taxation proposals are effective as soon as the Minister tables a notice of a Ways and Means motion, even though the government’s taxation plans have not yet been officially adopted by way of legislation. [332] _
_[332] It is the long-standing practice of Canadian governments to put tax measures into effect as soon as notice of the Ways and Means motions on which they are based are tabled in the House of Commons, with the result that taxes are collected as of the date of this notice, even though it may be months, if not years, before the implementing legislation is actually passed by Parliament (The Canadian Budgetary Process: Proposals for Improvement, p. 15)._
From:http://www.parl.gc.ca/marleaumontpetit/DocumentViewer.aspx?DocId=1001&Sec=Ch18&Seq=13&Language=E#fn332


----------



## BoringInvestor

gt_23 said:


> Actually the current federal government has fulfilled virtually all of it's commitments from the last election, with the exception of those that the unelected SCC has prevented them from implementing, so I don't find it strange at all from the current gov't.


I often find parties/politicians say they've fulfilled all their promises, but there's little proof to back the claim.

That said, I don't believe the claim, but I'm perfectly willing to look at evidence backing it up - does anyone have a scorecard detailing what the Conservatives promised, and what they fulfilled, similar to this example/article: http://metronews.ca/voices/ford-for-toronto/946427/rob-ford-pledge-o-meter-has-ford-really-done-90-of-what-he-said-hed-do/.


Re: the SCC, that's what they're there for - to interpret the law and to right or remove any unreasonable restrictions.


----------



## Davis

I don't disagree with any of the above, but the key point is that it is custom, rather than law. If parliament does not pass the neessary amendments before the summer recess, then there is uncertainty about what a future government will do. I cannot image a Trudeau or Mulcair or May government introducing amendments to increase the limit to $10,000, but I also don't think that they would want to apply penalties to people who have acted on the budget announcemnt. I would not be surprised if they find some saw-off like: you're okay if you contributed $10,000 in 2015, but the extra $4500 over the limit counts toward your $5500 limit in 2016. 

But I am only speculating here. For my money, I am going to wait to see if the budget bill includes the amendments before acting.


----------



## peterk

I highly doubt that people contributing now would be penalized at all. It would be horrible press for the Liberals. What Davis suggested above about reducing the 2016 room would probably be the very worst case scenario, and still unlikely to happen IMO.

I'll go ahead and deposit shortly to take advantage of the new limit. It's better to beg forgiveness that to ask permission, as the saying goes. And I bet Mr. wavy locks never-had-a-job will be very forgiving if he somehow wins.


----------



## gibor365

I just wondering if anyone call their bank or discount brokerage and asked about this additional contribution...


----------



## My Own Advisor

I probably will gibor but I'm speculating they don't know the answer. Just a guess....

I also cannot imagine a Trudeau or Mulcair or May government changing the $10,000 limit. 

I'm going to wait and put the cash into the account in January 2016. Besides, I need to save the cash first!


----------



## mrPPincer

gibor said:


> I just wondering if anyone call their bank or discount brokerage and asked about this additional contribution...


I asked when I was talking to them (CIBC IE) today. The rep said they had a big talk about it this morning, but it seems they know about as much as we do. He said the CRA site still says $5500 & he wouldn't put any in until they know more; it's government, so you could be taking a risk if you count on anything they're saying this early.


----------



## gibor365

> He said the CRA site still says $5500 & he wouldn't put any


 this is also what i was thinking about... next week we should get some CRA refund and I hope thinngs will be more clear until then


----------



## none

My Own Advisor said:


> I probably will gibor but I'm speculating they don't know the answer. Just a guess....
> 
> I also cannot imagine a Trudeau or Mulcair or May government changing the $10,000 limit.
> 
> I'm going to wait and put the cash into the account in January 2016. Besides, I need to save the cash first!


I really hope Justin drops that. I fear he'll lose a lot of people if he threatens to axe the TFSA increase. Now that the indexing is gone and the rise was to 10K some of the bite is out of it.

It also helps to encourage people to invest/save rather than buy housing. I think most people would agree the Canadian housing market could use fewer people in it.

I think they should tax capital gains on houses. That would also help deflate it.


----------



## gibor365

> I think they should tax capital gains on houses. That would also help deflate it.


This is complete BS ... if you buy house 20 years ago for 300K and sell now for 600K, you will be paing taxes on 300K?! , but if you invested in your house (for example renovations) another 200K , would it be fair?! and should be inflation taken in consideration for those 20 years?!


----------



## OnlyMyOpinion

_*"I also cannot imagine a Trudeau or Mulcair or May government changing the $10,000 limit."*_
Yikes folks:eek2: In any of those scenarios, a rollback of the TSFA limit would be the very least of our concerns


----------



## gibor365

OnlyMyOpinion said:


> _*"I also cannot imagine a Trudeau or Mulcair or May government changing the $10,000 limit."*_
> Yikes folks:eek2: In any of those scenarios, a rollback of the TSFA limit would be the very least of our concerns


:biggrin:


----------



## gibor365

So far we're good 
http://www.electionprediction.org/2015_fed/index.php
Current Prediction:
Changed: 2015-04-21 00:09:51 
Conservative Party 109
Liberal Party 41
N.D.P. 43
Bloc Quebecois 1 
Green Party 1
Too Close 143 
Total 338


----------



## none

I trust this source a little more:

http://www.threehundredeight.com/

I think it'll end up with a minority with no lib/NDP coalition. It'll be a squeaker either way though.









Any way you slice it out electoral system is unfair. For a party to have exclusive control with 33% of the popular vote just isn't right.


----------



## BoringInvestor

none said:


> Any way you slice it out electoral system is unfair. For a party to have exclusive control with 33% of the popular vote just isn't right.


Absolutely this.
A move to proportional representation would be beneficial to our democratic system.


----------



## Guban

mrPPincer said:


> I asked when I was talking to them (CIBC IE) today. The rep said they had a big talk about it this morning, but it seems they know about as much as we do. He said the CRA site still says $5500 & he wouldn't put any in until they know more; it's government, so you could be taking a risk if you count on anything they're saying this early.


RBC DI said the same thing. They are likely just trying to cover their buts, though, and gave the most conservative answer they could.


----------



## gibor365

Anyone called CRA?


----------



## humble_pie

the Liberals would be foolish to miss what a glittering campaign bonanza a TFSA is for young people, aka young voters. 

gummints could raise consumption taxes slightly to make up for future tax revenue shortfalls attributable to TFSAs. But in the meantime the boost to every voter's potential financial worth is dazzling.

the appealing thing is that a TFSA is so independent. Apart from replacement restrictions, there are few restrictions. It truly is a chicken in every pot.

another beauty is that, even for folks who use tax-frees like glorified savings accounts, inevitably & inexorably a real-life TFSA is going to teach the virtue of saving with a truly stunning absence of pain. For a late teen or a 20-something, one TFSA can successfully replace 100 hours of bookish study about personal finance (a subject they're never taught in school anyhow.)

a question for the Liberals should go What about less advantaged young people?

some young persons appear here in cmf forum & their starter salaries are quite low, sometimes as low as the 30k range. When such a young person also has student debt to pay off plus he or she has to face the high cost of housing today, it's incredibly hard to preach Save Save Save Save!

how to help these young people get ahead? i'm not worried about kids from well-off families whose parents can fund at least starter TFSAs for them. I'm concerned for the deserving youths whose backgrounds are not advantaged. A TFSA is a dream vehicle for them to save for graduate school, a house, a motorbike, a sabbatical year of global travel ... 

but on a low starter salary, with the high costs of housing today, how can young people be helped to save enough to build a TFSA that's meaningful? maybe they should be given special non-refundable tax breaks for TFSA contributions? tax breaks for low-income-age-28-&-unders? or even (more incentive) refundable tax breaks? with the latter there'd have to be provisos to prevent laundering $$ into TFSAs strictly to capture the refunds, though.

like they say, there's a chicken in every canadian pot. The liberals should wake up to the bling potential in TFSAs for young voters before the NDP get it.


----------



## sags

One problem is the young people will have to pay the cost of the lost revenue in the future.

I posted what Joe Oliver's comments were regarding that, and the media has already picked up on it.

There is Oliver answering the question of transferring the cost to future generations with, it is for "Stephen Harper's granddaughter' to deal with.

Not good optics there. As the CBC said today, expect that little video clip to be front and centre in election advertising for the NDP and Liberals. Reminiscent of what Conservative election ads did to Stephane Dion's chances of being elected.

The Liberals are going to promote expansion of the CPP heavily. Several provincial Premiers will be happy to agree with them. Wynne will be ecstatic.

I think the Liberals will probably just freeze the TFSA at the old 2014 levels and leave it at that. Most people haven't used up their allowable room and won't care if it is frozen.

The Liberals will be announcing other popular initiatives to change the debate and put the heat on the Conservatives.

Legalization and taxation of marijuana, expansion of the CPP, and matching skill training for workers with available jobs, will change the election narrative.

That is what the Liberals will be hoping anyways..........it will be an interesting election, to see if all the pre-election announcements by the Conservatives pay off, or did they give the opposition the opportunity to steal the election theme later.


----------



## humble_pie

sags said:


> One problem is the young people will have to pay the cost of the lost revenue in the future.
> 
> I posted what Joe Oliver's comments were regarding that, and the media has already picked up on it.
> 
> There is Oliver answering the question of transferring the cost to future generations with, it is for "Stephen Harper's granddaughter' to deal with



quite a few people have already suggested, in this thread & the other thread, an increase in consumption taxes to compensate for eventual lost tax revenues due to TFSAs.

it's all good imho since it would help shift the focus somewhat from a consuming society to a saving society.

there are already safeguards & rebates built into existing taxation to protect low-income families from increased consumption & property taxes, these might have to be re-jigged.

sags re your list of campaign issues with supposed broad appeal - legalization & taxation of maryjane, increased CPP, increased skill training for workers - OK maybe maryjane has sex appeal but don't you think the others are about as boringly dull as preaching we-shouldn't-bomb-ISIL-we-should-be-air-dropping-teensy-little-CARE-packages-of-food-to-villagers-instead?


----------



## doctrine

My Own Advisor said:


> I also cannot imagine a Trudeau or Mulcair or May government changing the $10,000 limit.


Both Trudeau and Muclair have already promised to axe the increase, as well as remove income splitting for parents.


----------



## humble_pie

^^^

a lot of stuff gets said in lead up to campaigns, i wouldn't take mumblings from trudeau or muc lair serious at this point in time


----------



## newfoundlander61

Can't decide what to buy with the extra $4,500 I have sitting in my bank account. Could buy more units in my Mawer Balanced Fund, hmmm decisions decisions


----------



## sags

humble_pie said:


> quite a few people have already suggested, in this thread & the other thread, an increase in consumption taxes to compensate for eventual lost tax revenues due to TFSAs.
> 
> it's all good imho since it would help shift the focus somewhat from a consuming society to a saving society.
> 
> there are already safeguards & rebates built into existing taxation to protect low-income families from increased consumption & property taxes, these might have to be re-jigged.
> 
> sags re your list of campaign issues with supposed broad appeal - legalization & taxation of maryjane, increased CPP, increased skill training for workers - OK maybe maryjane has sex appeal but don't you think the others are about as boringly dull as preaching we-shouldn't-bomb-ISIL-we-should-be-air-dropping-teensy-little-CARE-packages-of-food-to-villagers-instead?


Boring perhaps, but polls have indicated that Canadians put lowering taxes well down their list of priorities, after job creation, spending on infrastructure, transit..........but then of course, polls lately have been notoriously wrong.

I am guessing that is the agenda the Liberals will throw out there. If it is successful or not remains to be seen.


----------



## My Own Advisor

humble_pie said:


> ^^^
> 
> a lot of stuff gets said in lead up to campaigns, i wouldn't take mumblings from trudeau or muc lair serious at this point in time


What they say vs. what they do are different things. This is politics after all. Whatever gets votes, they will listen to.


----------



## Westerncanada

humble_pie said:


> ^^^
> 
> a lot of stuff gets said in lead up to campaigns, i wouldn't take mumblings from trudeau or muc lair serious at this point in time



Regardless of whether it's financially better off for the long term to not have the TFSA limit raised.. I am very shocked Trudeau is going down the path of petitioning for more funds to stay with the government vs let the people save after tax money and earn interest. I think that is a risky campaign move to push for the people to pay more tax.. regardless of the position.


----------



## humble_pie

sags said:


> Boring perhaps, but polls have indicated that Canadians put lowering taxes well down their list of priorities, after job creation, spending on infrastructure, transit



sags are you serious? the ROC doesn't want lower taxes? i agree re job creation but are you saying that the ROC thinks infrastructure & transit are hottie election issues?

benh i can see why quebec goes it alone. I have never, not even once, heard anybody say that the belle province wants to vote on transit or infrastructure issues. Even when the bridges are falling down & the water mains are bursting, they do not want to vote on infrastructure.


----------



## humble_pie

Westerncanada said:


> Regardless of whether it's financially better off for the long term to not have the TFSA limit raised.. I am very shocked Trudeau is going down the path of petitioning for more funds to stay with the government vs let the people save after tax money and earn interest. I think that is a risky campaign move to push for the people to pay more tax.. regardless of the position.




it's early days yet, trudeau has had some common sense knocked into his head after a couple other blunders in his leadership, so no reason to believe he couldn't change course on the TFSA.

me i can't believe i've become such a TFSA fan. How many young people do we see come on here & say Hai-everybuddee-OK-it's-my-first-job-i'm-still-living-with-the-PAIR-ents-though-can-you-pleeze-tell-me-what-is-a-tee-eff-ess-EH-do-u-guys-think-i-should-have-one-could-i-put-US-DOLLARS-in-a-tee-eff-ess-eh?

there's an astonishing measure of freedom to a TFSA. The only rules, really, have to do with contribution limits & withdrawals. The effect of these rules is very beneficial for new investors, imho, because the rules make the tax-free sticky, in the sense that an investor can't loot it as easily as he could loot an ordinary savings account.

a TFSA is like a teddy bear. Everyone should have one.


----------



## none

Not giving something is VERY different from taking it away. Taking away the TFSA raise after it has been given I think would actually be a losing level mistake. At best, people will vote NDP in protest leading to a split vote - leading to a Conservative majority.


----------



## OurBigFatWallet

I called Questrade this morning about adding the extra $4500 into the TFSA and they referenced the CRA website and that it doesn't mention it on there so may be best to hold off. Sounds like they weren't quite sure how to answer the question. Has anyone else asked Questrade about this?


----------



## andrewf

Folks, please stop calling the poor broker CSAs and CRA. They will not have an answer for you beyond what you read in the paper.


----------



## humble_pie

nobody would be expecting the banks or the brokers or the fin advisors to say anything prematurely, though?

they'll wait on the legislation as will the CRA

when u think abbouddit, it's a little windfall for the banks & the brokers. All those savings being shaken out of piggy banks.


----------



## sags

Set aside for a moment, the growing revenue losses the TFSA will cost the government, the capital gain taxes they will lose when mega-TFSAs are bequeathed to beneficiaries tax free some time in the future, and the added cost to the OAS/GIS from avoided claw back provisions.

The TFSA is more a political statement by the Conservatives than a retirement tool for the masses. Remember this is a government who recently raised the age of collecting the OAS from 65 to 67, which effectively cost future retirees 2 years worth of benefits, so their concern for future retirees is a little sketchy.

They know the statistics and despite the gulf that exists between their portrayal of the TFSA as a retirement savings vehicle and the reality that the vast majority of Canadians have very little in their TFSA and use it as a daily interest bank account, the Harper government continues steadfast on this path, or any path that leads away from expansion of the CPP.

This government has a severe dislike for expanding the CPP (despite former Finance Minister Flaherty thinking it was a worthy idea), their pooled pension idea has been a resounding flop, and the TFSA is taking up residence as the Harper answer to expanding the CPP.

The Liberals support expanding the CPP over the TFSA. The CPP benefits all workers. Employers contribute to double the savings. The CPPIB says it can manage it.

The choice will be for Canadians to make.


----------



## doctrine

I find this whole debate fascinating. The doomsday scenario of $hundreds of billions of tax revenue lost is a false argument. Goverments will tax when and where they want, at will. There is no loss of tax revenue. The only real loss is if you ignore the TFSA while it exists, because the rules can change at any time. 

It is your personal responsibility and legal right to minimize taxes as much as you can within the regulations. Feel free to ignore the rules and campaign for change, such as higher consumption or income taxes vice a tax free savings vehicle, but meanwhile be sure to make the maximum contributions less be taken advantage of by those more tax savvy.


----------



## sags

I wouldn't be surprised to see less of Finance Minister Joe Oliver during the election campaign.

He made another questionable statement on a CBC radio interview..........suggesting that older Canadians should sell their homes to contribute the maximum into TFSAs.

The PMO must be thinking the less Joe is being interviewed............the better.


----------



## lonewolf

I really think investors are going to get burned if the TFSA limit rises. Both stocks & bonds are way over valued. Never before have there been so many bonds 5.3 trillion dollars of government bonds that are paying negative interest rates & trillions of dollars of bonds that pay almost no interest @ all. NYSE margin debt sky high when every thing collapses money held in TFSA will not be able to claim losses. This is the most dangerous market for the bulls since the inception of the DJI


----------



## none

Capital losses are irrelevant if there are no capital gains.


----------



## andrewf

doctrine said:


> Goverments will tax when and where they want, at will. There is no loss of tax revenue. The only real loss is if you ignore the TFSA while it exists, because the rules can change at any time.


Fair point, I guess this coincides nicely with something I read in Macleans. Essentially what we are seeing here is the shifting of the tax burden from investment income onto other parts of the tax base, like employment income, consumption, etc. The below echoes what I said earlier, but looks at in a way that is perhaps clearer.

http://www.macleans.ca/economy/econ...g-the-tfsa-expansion-wont-be-felt-until-2080/



> The most important feature of TFSAs is that room accumulates through time, starting at age 18. The annual limit started at $5,000 in 2009, moved to $5,500 in 2013, and the budget has now moved the limit to $10,000 from 2015 forward. This means that ten years from now in 2025, every Canadian who is age 34 or older will have full possible contribution room of $141,000. For a couple, that would be $282,000.
> 
> How many Canadians in their 30s have $282,000 of assets that are currently subject to tax? I don’t have easy access to the most recent data, but as of the 2005 Survey of Financial Security, fewer than one percent of families aged 30-40 have more taxable assets than they could fit in a TFSA, given those limits. (A complete analysis along those lines was published in 2012.) So, what this suggests to me is that *very few people in the future will have any need to pay much tax on investment income—TFSAs will provide almost total coverage of assets.*
> 
> This means that within ten years, our tax system will become one in which almost no one under 40 pays any tax on investment income. This is, to my mind, the main issue that the TFSA change brings forward. It’s not whether some people might be constrained by the current $5,500 limit. Of course there are some heavy savers (especially many of today’s seniors who have a lifetime of assets saved up) who could contribute more right now. But, in my view, we need to view the TFSA increase not as a one-year policy change, but as something that accumulates through time. From that vantage point, the consequences for the tax system are fairly radical.


----------



## yyz

lonewolf said:


> I really think investors are going to get burned if the TFSA limit rises. Both stocks & bonds are way over valued. Never before have there been so many bonds 5.3 trillion dollars of government bonds that are paying negative interest rates & trillions of dollars of bonds that pay almost no interest @ all. NYSE margin debt sky high when every thing collapses money held in TFSA will not be able to claim losses. This is the most dangerous market for the bulls since the inception of the DJI


Why will they get burned just because the TFSA limit rises?Don't you think they will invest it somewhere else if not there?I don't see the difference.


----------



## GOB

Great news for me, but this is just going to increase the divide between the wealthy and poor. I would frankly vote against this policy for the greater good. Not many people I know who can put away $11,000 a year, let alone know how to grow it at more than 2%. Oh well.


----------



## lonewolf

yyz said:


> Why will they get burned just because the TFSA limit rises?Don't you think they will invest it somewhere else if not there?I don't see the difference.


yyz, The markets are @ or near all time highs so odds are higher investors would have paid capital gain taxes on profits over the last few years then if the market was @ historic lows. If an investor has paid capital gains in previous years they can only roll over capital gains so many years ( something like 3-5yrs ) & if the investor has a year of losses they can get tax back on the capital gain tax they paid. Think about it an investor pays tax on 100,000 of capital gains for a given year then the following year losses a 100,000 they have made no money & if they were not able to get back the tax paid on the 100,000 of capital gains the investor would have paid thousands of dollars of tax for money not even made over the 2 year period. Keep in mind that losses can be carried over so many years also so the losses can be claimed against the capital gains.

I am saving my TFSA for a time when the DNA markers that are seen @ historic lows are present. For now I keep the money in TFSA safe in GICs of online Manitoba credit unions. 

The investor will get burned from not getting a refund from the tax paid on capital gains when the market tanks is the biggest problem I see going forward over he next few years by those putting money in TFSA @ this part of the cycle.


----------



## uptoolate

Is there no way to get these two threads merged or are they totally different topics?


----------



## yyz

lonewolf,
I understand what you're saying but there's also no claiming capital losses inside an RRSP either .Leaves an unregistered account for what you want.
Just because something can happen doesn't mean it's going to happen.There are safe investments for RRSP's and TFSA accounts as well.


----------



## humble_pie

uptoolate said:


> Is there no way to get these two threads merged or are they totally different topics?



i think now there are 5 threads, who knew TFSAs could trigger so much passion


----------



## Eclectic12

lonewolf said:


> ... I am saving my TFSA for a time when the DNA markers that are seen @ historic lows are present... The investor will get burned from not getting a refund from the tax paid on capital gains when the market tanks is the biggest problem I see going forward over he next few years by those putting money in TFSA @ this part of the cycle.


YMMV ... some of what I've transferred, using other CL to negate the CG for the in-kind transfer to the TFSA has a cost of around $5 for an investment that's trading at $24. I expect I'll notice and take action long before it drops that much.

Then too, with most of the investments spinning off cash - there's a limited but nice supply of cash to redeploy.


Cheers


----------



## al42

Anyone know if this is actually a fact? You can top up 2015 TFSA contribution to 10K.

http://business.financialpost.com/p...anadians-top-up-tfsa-for-2015?__lsa=b5f7-a031


----------



## humble_pie

at least 3 brokers (bmo, td, cibc) have officially confirmed that they're permitting new transfers into TFSAs up to the new limit of 10k for this year. There are probably other brokers so confirming that we haven't heard about. Probably confirming right this minute.

the speed of the move surprised me, i'd assumed that brokers would take the conservative route & wait for the legislation to pass. However brokers are acting as trustees for TFSAs, which means that jurisprudence binds them to fair, responsible & ethical conduct at all times, so one can only assume that the brokers have consulted painstakingly & at length with their house solicitors.

following an official broker welcome mat, i tend to believe that such broker is assuming at least some liability in the remotest chance that some upset or reversal might occur during the passage into law.


----------



## Davis

^ That's a reasonable conclusion to draw. I don't think those brokers would move on this without thinking it through and getting legal advice. They don't want to misadvise their clients.


----------



## Eclectic12

humble_pie said:


> ... the speed of the move surprised me, i'd assumed that brokers would take the conservative route & wait for the legislation to pass. However brokers are acting as trustees for TFSAs, which means that jurisprudence binds them to fair, responsible & ethical conduct at all times, so one can only assume that the brokers have consulted painstakingly & at length with their house solicitors.


 ... or they are set to argue that "the majority gov't said so" ... after all, if there is a problem - they can also say "it's up to the investor to track the limits - there's no way for us to know that a suitable TFSA withdrawal did or did not happen last year to cover it". :biggrin:


Cheers


----------



## humble_pie

:biggrin: eclectic i don't imagine that centuries of common law jurisprudence weighing heavily on the conduct of trustees would allow brokers to get away with slithering around on slimy arguments ...

i imagine there's only the tiniest sliver of a next-to-zero chance that setback or reversal will occur on the path to It's Da Law.

what would you say to this: the brokers have already calculated the dollar amount probabilities of liability as trustees if the unthinkable happens vs all the mega bucks they stand to earn as folks shake their piggy banks & trundle those sparkling new $$ into their broker-held TFSA investment accounts ...


----------



## yyz

If I wanted more proof I'd send an email to my friendly MP's office and ask .Get it from the horses mouth so to speak.


----------



## Beaver101

yyz said:


> If *I wanted more proof I'd send an email to my friendly MP's office *and ask .*Get it from the horses mouth *so to speak.


 ... haa haa haa on the anticipated response: just wait until we're elected or oops, I lied. :biggrin:


----------



## mf4361

http://www.theglobeandmail.com/glob...ra-tfsa-contributions-ottawa/article24088860/

No need to wait to make extra TFSA contributions: Ottawa


----------



## carverman

Beaver101 said:


> ... haa haa haa on the anticipated response: just wait until we're elected or oops, I lied. :biggrin:


Ya, just write to Justiin "poor little rich boy who inherited millions from his fathers estate" Tru-dough. he doesn't want you to have that additional contribution
limit. he already commented on that outside the H of C. He wants to get rid of the TFSA completely as it is a tool for the rich to get richer and he would prefer
that you rich people out there pay the extra taxes on all your investments to support...er..the Liberal Party of Canada.


----------



## Beaver101

^ My comment applies to any MP or political party of Canada - please keep in mind I'm not partisan to any one of them.


----------



## Xoron

Well, the CRA now has updated their page:
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/cntrbtn-eng.html




> Note
> *Under proposed legislation, the annual TFSA dollar limit for 2015 is $10,000.*


----------



## slacker

Xoron said:


> Well, the CRA now has updated their page:
> http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/cntrbtn-eng.html
> 
> 
> 
> View attachment 4273


Not good enough. The website stated the facts, that the legislation is currently in proposal. Until CRA says, "the law says that the limit is $10k", this is not confirmed.


----------



## Xoron

slacker said:


> Not good enough. The website stated the facts, that the legislation is currently in proposal. Until CRA says, "the law says that the limit is $10k", this is not confirmed.


Agreed. I'm going to sit on the sidelines for now until it's a clear go


----------



## CPA Candidate

It is the CRA’s longstanding practice to ask taxpayers to file (or contribute to the TFSA) on the basis of proposed legislation. The budget will be passed. Nobody is going to campaign on taking your TFSA away (unless they want a sound beating). The Conservatives have painted the opposition into a corner.


----------



## Getafix

Quick question guys: 

Instead of transferring $4500 cash to my TFSA, can i journal some shares over from my non-reg account?


----------



## andrewf

Worst case, a new government would allow the $10k limit for 2015 and reduce it back down to $5500 for 2016. I can't see any party penalizing taxpayers for contributing $10k this year. It would be a lot of bad publicity for no appreciable gain.


----------



## andrewf

Getafix said:


> Quick question guys:
> 
> Instead of transferring $4500 cash to my TFSA, can i journal some shares over from my non-reg account?


You can transfer assets in kind, but it counts as a deemed disposition and you are subject to capital gains based on market price as of the transfer.


----------



## carverman

CPA Candidate said:


> It is the CRA’s longstanding practice to ask taxpayers to file (or contribute to the TFSA) on the basis of proposed legislation. The budget will be passed. Nobody is going to campaign on taking your TFSA away (unless they want a sound beating). The Conservatives have painted the opposition into a corner.


Or conversely..the opposition have put their proverbial foot in their mouths...announcing on national TV,* that if elected they will rescind this proposal as it only benefits the rich" ..*
and ( Mulcair NDP) "who's got $60,000 to put into a TFSA anyway?"..

Muclair always seem to find words that seem like "blowing smoke out of ..well you know where!

The TFSA, introduced in 2009, started off with a max contribution of $5000 per year, same in 2010,2011,2012. 
In 2013 it got raised to $5500 due to inflation and it remained the same in 2014. = ($31,000) 
*NOW it will be $10,000*. 

So if I add up the number of years x maximum contributions..that is $31,000 + $10,000 = $41,000 you could have sitting in your TFSA by the end of this year + growth, that is...if you don't do any withdrawals.


----------



## carverman

andrewf said:


> Worst case, a new government would allow the $10k limit for 2015 and reduce it back down to $5500 for 2016. I can't see any party penalizing taxpayers for contributing $10k this year. It would be a lot of bad publicity for no appreciable gain.


They would have to disclose that in the election campaign and that could be a show stopper for them..otherwise it's political hoodwinking of the public..
not good for any government starting off when they take away savings from an ordinary citizens

...(not talking about the "rich" here..you are on your own!):biggrin:


----------



## slacker

Ok, here is the confirmation:

http://news.gc.ca/web/article-en.do...427984701&utm_source=mediaroom&utm_medium=eml

"Canadians can immediately take advantage of the proposed $10,000 Tax-Free Savings Account annual contribution limit"

"The Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P., Minister of National Revenue, and the Honourable Joe Oliver, Minister of Finance, are advising Canadians that the Canada Revenue Agency (CRA) is allowing individuals to immediately benefit from the proposed increase to the Tax-Free Savings Account (TFSA) annual contribution limit announced in Economic Action Plan 2015."


----------



## 0xCC

CPA Candidate said:


> It is the CRA’s longstanding practice to ask taxpayers to file (or contribute to the TFSA) on the basis of proposed legislation. The budget will be passed. Nobody is going to campaign on taking your TFSA away (unless they want a sound beating). The Conservatives have painted the opposition into a corner.


This is close to the wording found here:
http://www.fin.gc.ca/n15/15-046-eng.asp

I think that page (posted by Toronto.gal here: http://canadianmoneyforum.com/showt...ollars-in-2015?p=663753&viewfull=1#post663753) pretty much seals it. This makes it sound like the Conservatives plan to pass this budget before the summer break which would hopefully make anything that happens after the election a "going forward" sort of a change, not a retroactive one. At the very least this statement removes the chance of the CRA imposing onerous penalties in an "over-contribution under the pre-$10,000 annual limit change" case.

Edit: slacker types faster than I do.


----------



## Eclectic12

andrewf said:


> You can transfer assets in kind, but it counts as a deemed disposition and you are subject to capital gains based on market price as of the transfer.


True ... though depending on how the broker handles it, one may be able to pick any value the investment traded for earlier in the day. I used this in 2009 to transfer a long term hold for a tiny CG.

As well, where one has capital losses that haven't been used yet ... one can reduce the CG by the CL. I used both carryover CL as well as tax loss selling in Dec to wipe out the CG from the in-kind transfer to the TFSA.


Then too ... unless the investment tanks in the future, one may have a CG anyway so I don't sweat a bit each year as going forward, as it's in the TFSA, it is Canadian tax free.


Cheers


----------



## cainvest

slacker said:


> Ok, here is the confirmation:
> 
> http://news.gc.ca/web/article-en.do...427984701&utm_source=mediaroom&utm_medium=eml
> 
> "Canadians can immediately take advantage of the proposed $10,000 Tax-Free Savings Account annual contribution limit"
> 
> "The Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P., Minister of National Revenue, and the Honourable Joe Oliver, Minister of Finance, are advising Canadians that the Canada Revenue Agency (CRA) is allowing individuals to immediately benefit from the proposed increase to the Tax-Free Savings Account (TFSA) annual contribution limit announced in Economic Action Plan 2015."


Good enough for me, time to throw the money over the TFSA fence.


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## mrPPincer

Yep, good enough, thanks for the link slacker, just initiated a 4.5K transfer from PCF to PT.


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## al42

Yup...thanks everyone. Will do the transfer on Monday.


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## Itchy54

Woohoo, off to transfer right now....


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## gibor365

I'm curious ....if anyone overcontributed in January by mistake (on not ) , he won't pay any penalty?!


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## andrewf

^ Correct.

I'm not sure why everyone was so anxious about whether they should contribute or not. The announcement was pretty clear.


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## none

That or what was the rush to get in the DAY OF. Not paying taxes on a week of gains should be trivial.


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## gibor365

none said:


> That or what was the rush to get in the DAY OF. Not paying taxes on a week of gains should be trivial.


Depends on gains  If anyone bought AMZN yesterday (I didn't . even though my son told me on Wed to buy it ) , up non-taxable 15% in 1 day ...


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## Synergy

gibor said:


> Depends on gains  If anyone bought AMZN yesterday (I didn't . even though my son told me on Wed to buy it ) , up non-taxable 15% in 1 day ...


I was thinking the same! Early bird gets the worm!


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## 0xCC

andrewf said:


> ^ Correct.
> 
> I'm not sure why everyone was so anxious about whether they should contribute or not. The announcement was pretty clear.


Because it is an election year. The budget announcement is not worth the paper the receipt for the Finance Minister's new shoes is printed on if the budget does not pass into law before Parliament is dissolved for the election.

The recent statements from the Minister of Revenue and the Finance Minister have made it clear that they intend to pass the budget before dissolving Parliament for the election.


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## plasmasnake

0xCC said:


> Because it is an election year. The budget announcement is not worth the paper the receipt for the Finance Minister's new shoes is printed on if the budget does not pass into law before Parliament is dissolved for the election.
> 
> The recent statements from the Minister of Revenue and the Finance Minister have made it clear that they intend to pass the budget before dissolving Parliament for the election.


I was worried about transferring the money over as well, but even in the unlikely scenario where the budget doesn't pass, I don't see how the Canadian government can penalize people for for doing something that they were given the green light for. It would be the Canadian government's responsibility for prematurely giving people the OK, so I don't see how they would have the legal authority to impose a penalty. Regardless of who's in power, the government is accountable for what they tell the public. I wonder if the overcontribution penalty is even spelled out in law, or if it's left to the government's discretion.


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## 0xCC

plasmasnake said:


> I was worried about transferring the money over as well, but even in the unlikely scenario where the budget doesn't pass, I don't see how the Canadian government can penalize people for for doing something that they were given the green light for. It would be the Canadian government's responsibility for prematurely giving people the OK, so I don't see how they would have the legal authority to impose a penalty. Regardless of who's in power, the government is accountable for what they tell the public. I wonder if the overcontribution penalty is even spelled out in law, or if it's left to the government's discretion.


Sure, the over contribution penalties are just left to the whims of whoever happens to be in power. http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/txtn/txtn-eng.html. And http://www.fin.gc.ca/drleg-apl/ita-tfsa-010709n-eng.asp.

Recently in Ontario we had a situation where a budget was announced and Parliament was dissolved before the budget was passed. That budget became the campaign platform for the Ontario Liberals and the budget actually passed after the election when the Liberals were elected with a majority. That was a different situation because the Liberals only had a minority and didn't actually call the election themselves, the NDP made the budget vote a vote of confidence and the Liberals were forced into an election.

The federal Conservatives could have used this budget as an election platform. Until the joint statement from the ministers last week it was not clear if they were going to do that or not.


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## donald

I don't know much about politics but....did nobody in the government foresee ahead of time the confusion it would create.
Talk about mishandling it(retroactive 2015)seems comical coming from the highest level.


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## RBull

GoldStone said:


> Some of the most vocal haters in this thread are government workers. Not going to name the names but we all know who they are. It's amazing they find the time to post their hate right in the middle of a work day - probably right from their government cubicles. More tax revenue = more money in their pockets (their militant unions will see to that). So the hate is not at all surprising. Follow the money trail.


I'm glad you're back.


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## none

Edit: I give up.


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## besmartrich

Now Liberal is elected, I am curious to see whether Justin would revert back annual TFSA room from 10K to 5.5K. What about income splitting for couples with children? I don't have kids yet but I thought that will be amazing as my income is higher than my wife's. Hopefully Justin brings better income splitting plans.

BSR


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## noobs

One of the things I didn't like about the Liberal platform is the reduction of the TFSA. I like having money to invest tax free


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## The_Tosser

noobs said:


> One of the things I didn't like about the Liberal platform is the reduction of the TFSA.


Nicely said.

Evidently, given the electoral results, most people enjoy shooting themselves in the foot. It's out of ignorance i would suspect, less i come down too hardly on the intelligent and responsible voters of this fine land.

When you look at it this is one of the very few election platforms that the government can have a direct impact on that actually matters to the individual, so this point should have been very high up on the list of items to cast a vote over. It's not like the ruling party has much impact on say oil prices, the signing of the TPP (it's a given, it's in, always has been) or the strengthening of the CAD economy as if the world (read USA) we trade with has no impact whatsoever, lol etc. These are quite frankly out of their control, unlike the TFSA contribution room so they really can be ignored as input to the decision.

If people could only separate the noise from the important stuff that directly impacts them, i would be nicely surprised.

All one can really hope for is that Trudeau follows the entire line of leaders on both side of the fence and forgets or ignores all campaign 'promises'. Given the general rule of expecting the worse out of elected officials, i fear this is one bad idea he will uphold.


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## 0xCC

besmartrich said:


> Now Liberal is elected, I am curious to see whether Justin would revert back annual TFSA room from 10K to 5.5K. What about income splitting for couples with children? I don't have kids yet but I thought that will be amazing as my income is higher than my wife's. Hopefully Justin brings better income splitting plans.
> 
> BSR


You don't have to guess about what Justin's plans are. They laid out their platform pretty clearly. Here is an example of a document outlining plans for tax changes:
https://www.liberal.ca/files/2015/0...?file=2015/08/Growth-for-the-Middle-Class.pdf

Here is the website with most of their platform documents:
http://www.liberal.ca/backgrounders/

I think that non-pension income splitting is likely going to be eliminated (I'm pretty sure it is in their platform somewhere but I don't have the time to find it right now...)


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## HaroldCrump

besmartrich said:


> Now Liberal is elected, I am curious to see whether Justin would revert back annual TFSA room from 10K to 5.5K.


Most likely will happen in 2016 budget.
I am personally okay with it, even though it affects me personally (I am among those with a maxed out TFSA).
One can always invest in a taxable account...in these days of low fixed income yield, the impact is not severe.
In the future, if rates rise where GICs are paying 5%+, it may be a factor.



> What about income splitting for couples with children?


Yeah, that will most certainly be nuked.
UCCB will also be scrapped.
That is what will pay for the new Child Benefit for "middle class" income earners, worth up to $5,000 a year per child, means tested.


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## TomB19

besmartrich said:


> Now Liberal is elected, I am curious to see whether Justin would revert back annual TFSA room from 10K to 5.5K. What about income splitting for couples with children? I don't have kids yet but I thought that will be amazing as my income is higher than my wife's. Hopefully Justin brings better income splitting plans.
> 
> BSR


He said he would reduce the benefit to $5K annually.


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## none

The_Tosser said:


> Nicely said.
> 
> Evidently, given the electoral results, most people enjoy shooting themselves in the foot. It's out of ignorance i would suspect, less i come down too hardly on the intelligent and responsible voters of this fine land.
> .


How ironic and that statement shows how you haven't even bothered to do the math in the difference on ones portfolio between 10K non-indexed and 5.5K indexed. It's trivial. Also the difference can easily be made up and then some by a better performing economy which is what I think any government other than a C government would do. Those guys sucked.

Thre's this: https://twitter.com/preetbanerjee/status/656505067185532928


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## My Own Advisor

noobs said:


> One of the things I didn't like about the Liberal platform is the reduction of the TFSA. I like having money to invest tax free


+1

I think we'll be fine for the 2016 contribution year, not so lucky for 2017.


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## OnlyMyOpinion

none said:


> How ironic and that statement shows how you haven't even bothered to do the math in the difference on ones portfolio between 10K non-indexed and 5.5K indexed. It's trivial. Thre's this: https://twitter.com/preetbanerjee/status/656505067185532928


Preet is only graphing the change in the annual contribution limit. That ignores the tax-free growth inside the TSFA

Please describe for us your math that demonstrates that the difference is trivial.

My spreadsheet indicates that $10k per year at 3% compound for 10 yrs will end up at *$118k*. 
But $5.5k per year, indexed at a 2%, with 3% compound for 10 yrs will end up at *only $71k*.
Over a longer period the difference would grow even greater. I wouldn't consider it trivial.


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## OnlyMyOpinion

I agree with AltaRed elsewhere that the Liberals are likely to introduce the TSFA and income tax changes before the end of 2015. 
The TSFA would be reduced effective Jan. 1, and the income tax changes will be effective for the 2015 tax year, prior to us doing them next spring.


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## Woz

OnlyMyOpinion said:


> My spreadsheet indicates that $10k per year at 3% compound for 10 yrs will end up at *$118k*.
> But $5.5k per year, indexed at a 2%, with 3% compound for 10 yrs will end up at *only $71k*.
> Over a longer period the difference would grow even greater. I wouldn't consider it trivial.


The difference is what won’t be sheltered in a tax free account. $118k minus $71k is $47k. $40k of that is due to the extra contributions ($4500 per year times 10, a bit less due to the 2% indexing). The remaining $7k was your capital gains which would be taxed. Assuming you’re in a 40% tax bracket you’d pay $7,000*0.2=$1,400 in taxes. That works out to $122 per year based on your 3% return.

When I worked it out assuming a longer investment period and a 6% return I came up with it costing me ~$388 per year. I wouldn’t consider it trivial and definitely would prefer they leave it at $10,000, but it’s not really an amount that I’m going to notice.


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## none

OnlyMyOpinion said:


> Preet is only graphing the change in the annual contribution limit. That ignores the tax-free growth inside the TSFA
> 
> Please describe for us your math that demonstrates that the difference is trivial.
> 
> My spreadsheet indicates that $10k per year at 3% compound for 10 yrs will end up at *$118k*.
> But $5.5k per year, indexed at a 2%, with 3% compound for 10 yrs will end up at *only $71k*.
> Over a longer period the difference would grow even greater. I wouldn't consider it trivial.


"And while the loss of the $10,000 annual TFSA will cost high-income earners who can afford to top it up each year (they’d be able to net $53,700 more on your investments over 30 years at the current limit), it won’t affect their wealth by nearly as much in the short term, says Graham Westmacott, portfolio manager at PWL Capital in Waterloo, Ont."

http://www.moneysense.ca/save/tfsa/what-to-do-with-your-tfsa-before-trudeau-trims-it/


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## gibor365

> and the income tax changes will be effective for the 2015 tax year, prior to us doing them next spring.


 do you think JT will increase taxes retroactively?! And what about income split?

P.S. I hope JT will be too busy exploring Paris in November on climate change party 
P.P.S. Go, Justin, Go


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## OnlyMyOpinion

Woz said:


> The difference is what won’t be sheltered in a tax free account. $118k minus $71k is $47k. $40k of that is due to the extra contributions ($4500 per year times 10, a bit less due to the 2% indexing). The remaining $7k was your capital gains which would be taxed. Assuming you’re in a 40% tax bracket you’d pay $7,000*0.2=$1,400 in taxes. That works out to $122 per year based on your 3% return.
> When I worked it out assuming a longer investment period and a 6% return I came up with it costing me ~$388 per year. I wouldn’t consider it trivial and definitely would prefer they leave it at $10,000, but it’s not really an amount that I’m going to notice.


Woz, thanks for completing the math. $7533 was the income in my example. We hold FI strips in our TSFA's so I consider the tax to be about ~$263 each year when it has to be held outside of the TSFA due to the reduced limit. I think the context - i.e. the government taking more tax dollars and discouraging saving - is as significant as the amount.


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## besmartrich

Here are several good articles about the impacts of Liberal victory.

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

http://www.montrealgazette.com/busi...ower+child+benefits+under/11453033/story.html

http://www.theglobeandmail.com/glob...eral-partys-election-victory/article26898571/


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## Flash

A quick confirmation about TFSA. Any funds withdrew can be replenished the next year correct? The contribution room for a new year is always "new contribution + any amount withdrew to date" correct?

For example, if I withdrew 10.000 this year, next year I can deposit back 5.500 + 10.000 to a total of 15.500 correct? (assuming 2016 will have back the 5.500 limit contribution)

If I withdrew 10.000 this year, and 5.000 last year (but never replenished the 5.000 - only deposited the 10.000 then withdrew them away this year), I can deposit 20.500 next year correct? (again, assuming the old 5.500 limit back)


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## mrPPincer

yep
new gov't means some changes coming but I seriously doubt any changes will be retroactive


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## MrMatt

mrPPincer said:


> yep
> new gov't means some changes coming but I seriously doubt any changes will be retroactive


He's arrogant and ignorant, but he still needs the support of the party to do anything.
Remember, he needs to get at least 169 other people to support his plans, and they don't all have multi million dollar trust funds to go home to.

I really don't like Trudea, or the Liberals, but really despite my whining and bitching, on the whole Canada has been fortunate to generally have had good leadership from our federal MPs.


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## Xoron

MrMatt said:


> I really don't like Trudea, or the Liberals, but really despite my whining and bitching, on the whole Canada has been fortunate to generally have had good leadership from our federal MPs.


Hopefully, now they can FREELY speak their minds. And not be whipped into line by the PM / PMO.

Like many others, my vote wasn't for Trudeau, it was a vote against Harper.


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## Eclectic12

Xoron said:


> Hopefully, now they can FREELY speak their minds. And not be whipped into line by the PM / PMO.


Maybe ... one has to wonder how free they are going to be.

It doesn't sound all that free for a issue that traditionally has been "vote by conscience" - to go on record saying the new MPs and new candidates have to vote the party line where incumbents are "grandfathered in to a certain extent".

http://www.theglobeandmail.com/news...will-have-to-vote-pro-choice/article19218815/


Cheers


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## GoldStone

Xoron said:


> Hopefully, now they can FREELY speak their minds. And not be whipped into line by the PM / PMO


Don't hold your breath. They all want to get re-elected to earn their platinum MP pensions. The safest way to get there is to toe the party line.

I don't recall many MPs speaking freely under Chretien. PMO dictatorship is not Harper's invention.


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## andrewf

It will be interesting to see about the free votes in Parliament. Other parties have promised the same in the past with little real change. Trudeau promised that on only confidence matters, measures promised in the platform and 'charter values' votes will be whipped, the rest with be free. I'm not sure how many votes that really leaves.


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## Eclectic12

andrewf said:


> It will be interesting to see about the free votes in Parliament.


It will be interesting.




andrewf said:


> Trudeau promised that on only confidence matters, measures promised in the platform and 'charter values' votes will be whipped, the rest with be free. I'm not sure how many votes that really leaves.


I wonder which category "pro-choice" fits?


Cheers


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## Xoron

GoldStone said:


> I don't recall many MPs speaking freely under Chretien. PMO dictatorship is not Harper's invention.


No, but they step out of line, and disappear from public view. I mean where did Joe Oliver go during the last weeks of the election? Banished to redemption island?


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## andrewf

I think Joe Oliver was respecting the leader and his team running the national campaign. Parties tend to get in trouble when their candidates start going rogue and off-message, and most candidates play along with the national strategy for that reason. Oliver made the point himself that the leadership made an error by not making it about Team Harper (like Team Martin when Martin was unpopular) but running on Harper (a guy with very strong negatives) = CPC.

It is and ought to be different during Parliament.


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## HaroldCrump

Xoron said:


> No, but they step out of line, and disappear from public view. I mean where did Joe Oliver go during the last weeks of the election? Banished to redemption island?


Joe Oliver did have a public appearance a couple of weeks ago with Poloz at some Chamber of Commerce in the mid-west.
Oliver is perhaps not an avid political campaigner like some others.
Not every cabinet minister can be expected to be a political campaigner...some are just different.

Keep in mind that Oliver is relatively older (75 or so).
He is not a career politician like some others - he has had a full-fledged career in the private and public sector before entering politics.
He entered politics relatively late in life, and lost his first bid for the HOC in 2008.

In some ways, I like the US system that does not require cabinet ministers (secretaries, as they are called) to be elected to the House of Representatives as a pre-condition to be assigned cabinet posts.


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## Woz

I think Joe Oliver was told to keep a low profile. You didn't hear much of him after he had to cancel that speech at the men's club due to the negative media attention.


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## andrewf

HaroldCrump said:


> In some ways, I like the US system that does not require cabinet ministers (secretaries, as they are called) to be elected to the House of Representatives as a pre-condition to be assigned cabinet posts.


There is no legal requirement that cabinet ministers be MPs in Canada, either. It is just a matter of convention that the cabinet needs to have 'democratic legitimacy'. I don't really agree, or rather I would say the legitimacy of cabinet flows from maintaining the confidence of the HoC.

Remember that Harper appointed Michael Fortier to cabinet when he was first came to power (day 1), despite him not being an MP or even a Senator.

I think to make such a system work, there would need to be changes to HoC to give the ministers standing to respond to questions during question period.


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## none

andrewf said:


> There is no legal requirement that cabinet ministers be MPs in Canada, either. It is just a matter of convention that the cabinet needs to have 'democratic legitimacy'. I don't really agree, or rather I would say the legitimacy of cabinet flows from maintaining the confidence of the HoC.
> 
> Remember that Harper appointed Michael Fortier to cabinet when he was first came to power (day 1), despite him not being an MP or even a Senator.
> 
> I think to make such a system work, there would need to be changes to HoC to give the ministers standing to respond to questions during question period.


This is very overstated too. There is a legion of unelected officials that filter what goes up to the MP level - these individuals have a tremendous amount of power is controlling what information actually gets up to that level and what is debated/discussed/ prioritized.


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## andrewf

Yes, it is far more scandalous the amount of power unelected partisan operatives wield through institutions like the PMO. They are never held to account publicly unless the media grabs hold of them (like with the Duffy fiasco). Harper prevented parliamentary committees from calling them as witnesses (part of the contempt of Parliament charge).

If you wield power, you need to be held to account.


----------

