# Rumours of TFSA increase



## gardner (Feb 13, 2014)

I haven't seen any discussion of this

http://news.nationalpost.com/2014/1...-tax-cuts-aided-by-shrinking-federal-deficit/



> Stephen Harper said Thursday that his government is about to implement major promises from the last election campaign, likely to include income-splitting for families with children and increased annual contributions for tax-free savings accounts to $10,000.


Any feelings on how likely this is? I recall that the tories had unambiguously backed away from income splitting last year. It's interesting to see them trotting it out again.

The idea of a TFSA hike, I would be keen on though.


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## peterk (May 16, 2010)

Income splitting and TFSA increases would provide little benefit to anyone other than above average earners. I guess though it doesn't really hurt the people that can't make use of it, and would perhaps sway higher income liberals over to conservative?

I for one feel the rich pay too much in taxes anyways, and these "indirect" tax cuts are a smart way to reduce taxes on the rich while not ruffling the feathers of low income earners too badly.

I think it's very likely it will happen. Harper wants to show that he will stay the course and keep the promises he made years ago. A politician following through on their promises is never a bad thing is it?


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## Pluto (Sep 12, 2013)

Whens the next election? That could be a clue.


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## cashinstinct (Apr 4, 2009)

Next election due http://en.wikipedia.org/wiki/Fixed_election_dates_in_Canada

"general election makes it probable that the date of the next general election will be determined by the fixed-date section of the Canada Elections Act.[9][10][11] This would cause the next election to be on October 19, 2015."


I simply hope that, if TFSA increases to $10,000, that it will stay there and not go down... we should be able to plan future years TFSA room (minimum at least).


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## HaroldCrump (Jun 10, 2009)

I highly doubt that income splitting will be implemented, given all the bad press around it.
But doubling of the TFSA is highly likely to be announced in the spring budget.
I'd be surprised if income splitting is implemented.


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## My Own Advisor (Sep 24, 2012)

I think a TFSA contribution room hike would be awesome. 

Will it happen? Like others said, only in an election year I guess.


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## Ihatetaxes (May 5, 2010)

Looking like a hike to $10k for 2015 possibly? I would be happy to see it happen.


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## HaroldCrump (Jun 10, 2009)

Should be $11K, if they are going to double (which is what they had promised).


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## fraser (May 15, 2010)

I think that you can count on it. This plus other election goodies. 

There will be a chicken in every pot and a pot on every stove come election time.


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## gibor365 (Apr 1, 2011)

It would be nice if TFSA room will increase to 10K in 2015... would be much less nice is Harper will promise to have it if he gets elected.... 
Regarding "include income-splitting for families with children" , I understand if 1st spouse get $150K and 2nd $50K, both spouses will pay taxes fron 100K and it should be less in total?! Is it correct? but not clear what should be children's age? 18? 21? how many children?
Also, about 6 years ago Harper promissed reduce GST by 1% annually. he did it for 2 years and stoped


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## heyjude (May 16, 2009)

I want income splitting for singles! It's just not fair. We don't get enough tax breaks. The cost of living for one is more than half the cost of living for two.


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## gibor365 (Apr 1, 2011)

heyjude said:


> I want income splitting for singles! It's just not fair. We don't get enough tax breaks. The cost of living for one is more than half the cost of living for two.


just wondering with whom single can share income :biggrin:


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## gibor365 (Apr 1, 2011)

Harper should follow UK, where Total subscription limit £15,000 and Junior account £4,000 (that equal in CAD$ 27,000K and 7,200! So family with with 2 kids can have close to 70K in untaxable income! WOuldn't need any RRSPs....
http://en.wikipedia.org/wiki/Individual_Savings_Account


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## heyjude (May 16, 2009)

With my alter ego!


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## AltaRed (Jun 8, 2009)

He only promised the second GST cut to 5% and that was the dumbest thing anyone did. It should go back to 7% and reduce income tax rates instead.

Regarding income splitting, the original plan was to cap it at $50k, i.e. middle class wage, so that the rich do not disproportionately benefit. It was to also apply to families with children under 18.


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## gibor365 (Apr 1, 2011)

AltaRed said:


> He only promised the second GST cut to 5% and that was the dumbest thing anyone did. It should go back to 7% and reduce income tax rates instead.
> 
> Regarding income splitting, the original plan was to cap it at $50k, i.e. middle class wage, so that the rich do not disproportionately benefit. It was to also apply to families with children under 18.


No sure...as far as i remember he promised to reduce GST 1% per year...
If cap is 50K, I will be against this plan


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## Synergy (Mar 18, 2013)

You've got my vote for a TFSA bump!


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## AltaRed (Jun 8, 2009)

gibor said:


> No sure...as far as i remember he promised to reduce GST 1% per year...
> If cap is 50K, I will be against this plan


From Wiki....


> The Conservative government promised to lower the federal Goods and Services Tax from 7% to 6% for the first budget and to lower it to 5% by 2011. There were some concerns from activists, that the cut would only benefit the rich. Some retailers have raised their prices to compensate... [1] Finally, there were also possibilities that some provincial governments take advantage and raise their provincial taxes. During the 2006 election campaign, the Martin government proposed income tax cuts for lower-middle income earners. The Liberals have claimed that the GST cut would effectively result in a tax increase for those in the lower-middle income bracket. The Conservatives argued that the GST cuts would benefit all Canadians, including low-income earners and those outside the workforce who do not pay income tax.
> 
> The first GST cut went into effect on July 1, 2006, and no provinces have raised provincial sales tax as a demonstrable result. Nova Scotia raised the provincial sales tax 2 points as part of deficit-fighting measures under the Dexter government; this was put in place on July 1, 2010.[2] The second cut was later announced in the 2007 Throne Speech and officially confirmed on October 30, 2007 during an economic statement update on the country finances.


From yet another source....


> The reborn Conservative party won in 2006 under Stephen Harper, pledging to cut the GST in two steps from seven per cent to five per cent. Despite pleas from economists, they kept that promise. The federal government’s strategy followed Burke’s maxim that “Politics ought to be adjusted not to human reasonings but to human nature.” Concerning the GST, the human nature of Canadians repeatedly elected governments that promised to abolish or reduce the GST, no matter what economists reasoned.


And as for the income splitting proposal.... from the Grope & Flail http://www.theglobeandmail.com/news...atieff-blasts-four-year-delay/article4266794/


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## Butters (Apr 20, 2012)

Totally argee 7 to 5%
Totally agree it was stupid

Bumping the limit to 10k don't matter to me. 
It's nice but how many ppl can donate nearly 1k a month

It's making the rich, richer!

I don't like a majority government!


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## gibor365 (Apr 1, 2011)

SheaButters said:


> Totally argee 7 to 5%
> Totally agree it was stupid
> 
> Bumping the limit to 10k don't matter to me.
> ...


Not stupid for me, I welcome any tax cut.
TFSA increase is excellent! If they will increase it from 5500 to 100,000 today, tomorrow , I would max it


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## andrewf (Mar 1, 2010)

peterk said:


> A politician following through on their promises is never a bad thing is it?


Depends if he promised to do something bad.


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## Sasquatch (Jan 28, 2012)

If they increased the TFSA contribution to $ 100 000.- I wouldn't vote for them....... ABC all the way


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## Synergy (Mar 18, 2013)

SheaButters said:


> It's nice but how many ppl can donate nearly 1k a month


A lot of people piss away hundreds of thousands of dollars per month on clothing they don't really need, expensive coffee and unnecessary fast foot meals, cigarettes, alcohol, crazy phone bills, expensive car payments, etc. People of all income levels should be saving more inside a TFSA IMO.


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## gibor365 (Apr 1, 2011)

Synergy said:


> A lot of people piss away hundreds of thousands of dollars per month on clothing they don't really need, expensive coffee and unnecessary fast foot meals, cigarettes, alcohol, crazy phone bills, expensive car payments, etc. People of all income levels should be saving more inside a TFSA IMO.


People should reas book "Millionaire next door"


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## Butters (Apr 20, 2012)

gibor said:


> Not stupid for me, I welcome any tax cut.
> TFSA increase is excellent! If they will increase it from 5500 to 100,000 today, tomorrow , I would max it


*rich get richer*

A tax cut means our government gets less money, which means they have less money for social services/programs
Health care cost is mandatory (fixed[or increasing] cost we must pay) so less and less money for education, national parks, etc...

It's way better to blanket everyone with a tax for wealth distribution

We want to be a better country, not a selfish rich individualistic


I currently live in Alberta, which is conservative dominated for what 44 years?
Conservatives said they would never introduce an Alberta sales tax

If this wild rose party gets elected, (they are all just a bunch of washed up conservatives)
they will introduce the Alberta sales tax, then get kicked out, now the conservative government will have a sales tax (they didn't implement) and will dominate for another 40 years





TFSA was first implemented for _families_ to save money and save a bit on taxes so they could buy a new car or other items
not for the purpose of the top million canadians (huge estimation) who can max it out every year, can benefit more and *get richer*

TFSA _does not help the majority of Canadians_, I bet half of canadians don't even use it / have the money for it
most of them live paycheque to paycheque, they'd rather pay off their overdue credit card then to top up a saving tool



Yes there are a lot of stupid Canadians, but we live in a rich country, the wealth should be disturbed more equally


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## gibor365 (Apr 1, 2011)

_they'd rather pay off their overdue credit card.....the wealth should be disturbed more equally _ first of all why they have overdue credit card.?! Live by your means.... and don't tell me stories that they don't have money.... I left CCCP with $160 allowed and 1 piece of luggage , but always paid all credit cards balances on time.
People who work hard and pay already much higher taxes - create wealth...it's already distributed too equally... You remind me guys from Communist Party - "take from rich, give to poor" and everyone know how it's finished.


> Yes there are a lot of stupid Canadians


 no! there a lot of lazy Canadians! Check who study in the best schools and universities! 90% immigrants. 
Even on this forum, some guys said...why do I need to open Tangerine account? Bonus only $50 and HISA is just 3%.... why to bother


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## Synergy (Mar 18, 2013)

SheaButters said:


> *rich get richer*TFSA was first implemented for _families_ to save money and save a bit on taxes so they could buy a new car or other items not for the purpose of the top million canadians (huge estimation) who can max it out every year, can benefit more and *get richer*


From the Government of Canada:



> The Tax-Free Savings Account (TFSA) is a flexible, registered, general-purpose savings vehicle that allows Canadians to earn tax-free investment income to more easily meet lifetime savings needs. The TFSA complements existing registered savings plans like the Registered Retirement Savings Plans (RRSP) and the Registered Education Savings Plans (RESP).


Seems like the TFSA was designed to be a little more "flexible" and "general". Was the primary role of the TFSA really to support short term savings and to fund a few frivolous purchases? People with that type of mentality will never get out of the rat race.



SheaButters said:


> I bet half of canadians don't even use it / have the money for it


Those same Canadians are pissing their money away and making the rich even richer by doing so.


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## Synergy (Mar 18, 2013)

gibor said:


> [IEven on this forum, some guys said...why do I need to open Tangerine account? Bonus only $50 and HISA is just 3%.... why to bother


Hey, that's a low blow. For some people, $50 is a drop in the bucket and the 3% is only for 3 months anyway. Yes I know you can bounce around to all the special rates back and forth and hopefully average 2-2.5% for the year but... My point was, some people have more money then they actually need and can't be bothered chasing these types of deals. You should be a little nicer, essentially I helped you earn $50 to help support your habit:biggrin:


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## peterk (May 16, 2010)

SheaButters said:


> Yes there are a lot of stupid Canadians, but we live in a rich country, the wealth should be disturbed more equally


Stupid meaning "stupid with their money" in this context yes? So then why should we be giving MORE money to the stupid people who are stupid with money in the first place? Doesn't that seem rather foolish and not of any benefit to the tax payer?

The ultimate achievement for the nation is to have a flourishing diverse economy, and a healthy, prosperous, vibrant people who take pride in their accomplishments, family and country.
How does taking money from the rich and giving it to the poor (yet incredibly wealthy by global standards) do anything to help achieve the above goals?


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## jamesbe (May 8, 2010)

$10k TFSA limit would mean moving to TFSA over RRSP would start to make a lot of sense for me.

It would also help those in retirement. Those that need to pull money out of RRSP or who are selling their homes to move to smaller homes. They could take that extra cash and dump in a Tax free growth account. Win-win.


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## Guban (Jul 5, 2011)

I would much rather see the government use the surplus to bring down the national debt. Seems like the responsible thing to do. Wouldn't you do this in your household? A lower debt will benefit all of us in the long term with lower taxes and more spending on social programs or whatever we want, but perhaps it is not about the long term - just about the upcoming election!


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## HaroldCrump (Jun 10, 2009)

SheaButters said:


> *rich get richer*
> A tax cut means our government gets less money, which means they have less money for social services/programs


This is the same old drivel of tax-everyone-to-death.
The definition of "rich" keeps changing (going down the scale of income) with each passing year.
This leads to bracket creep i.e. for same income you are now paying higher tax because you have been labeled as "rich" even though your income has not gone up.

This whole thing about providing public services is nonsense.
A larger and larger share of increased taxation is going towards placating govt. unions and other public sector workers.
What additional services have you seen in the last many years?
In fact, services are being cut, front-line service staff are being cut.

This is a transfer of wealth from the tax payers to a subsection of the public sector workers.
While front line service staff & services are being cut, the bureaucracy is increasing and those on the right side of bureaucracy are making more and more in benefits and pensions.

At the same time, provincial governments are spending massive amounts of money on creating fake agencies, departments, and regulatory bodies.
It is sapping up all the increased tax revenues, and they are taking on more and more debt.



> Health care cost is mandatory (fixed[or increasing] cost we must pay) so less and less money for education, national parks, etc...


Federal health transfers to the provinces have gone up significantly and is increasing at nearly 3X times the official rate of inflation (i.e. 6% a year increase).
Health care spending is a bogeyman...a smoke screen to hide the increased govt. spending on compensation and benefits.



> It's way better to blanket everyone with a tax for wealth distribution


Yes, blanket taxation...everyone pays 50% of their income as taxes. And then some.
Tax 'em, tax 'em all.
Down with the rich.



> We want to be a better country, not a selfish rich individualistic


Clearly, if you pay more taxes, you will become a better person.
You will become kind, gentle, sociable, and charitable.
Higher taxation not only improves the economy, it converts evil rich people to selfless saints.


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## fraser (May 15, 2010)

I think that tax fairness comes well down the list for this Government-and most others for that matter. If they can achieve some measure of it in the by going then all well and good.

The focus, 100 percent, is on getting re-elected.

I could be mistaken but the Harper Gov't should be worried about people like me. I happen to live in a region that is predisposed to them. I am very much of the right demographic and in a socioeconomic group that is a very natural supporter of the Conservative Party. But this isn't my first rodeo and I do not plan to support Harper in the next election. He lost my trust some time ago. I do not believe him and I believe that he is just as disdainful of democracy and the Parliamentary system as any PM in history.

What surprises me is the number of those duck taped toadies that are sitting on the Government benches and even in the front benches. They cannot even smile without permission from the PMO. Nothing but a bunch of self serving, gutless hangers on hoping to get elected enough to make it to an MP's golden handshake and golden pension. Political eunuchs.....they should be ashamed of their collective silence and inaction within the Party.


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## Synergy (Mar 18, 2013)

jamesbe said:


> It would also help those in retirement. Those that need to pull money out of RRSP or who are selling their homes to move to smaller homes. They could take that extra cash and dump in a Tax free growth account. Win-win.


Exactly!


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## Jon_Snow (May 20, 2009)

What's this? TFSA increase? Yes please.


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## Eder (Feb 16, 2011)

I like your post HC, thanks for taking the time to type it out.


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## jamesbe (May 8, 2010)

HC for president... err minister?


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## pwm (Jan 19, 2012)

Guban said:


> I would much rather see the government use the surplus to bring down the national debt.


I'm with you Guban. I would vote for any party that would do so. Although there's probably only one other curmudgeon in the country who would agree with us.

The rest want more benefits and lower taxes.


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## peterk (May 16, 2010)

I agree with Harold.

Unfortunately I don't think there is any solution at all. This is natural progression of government/society when you let every citizen have an equal say. A person cannot be expected to vote in the best interests of a country when they themselves pay no or very little taxes, and can vote themselves additional services and money at no personal expense or consequence.


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## pwm (Jan 19, 2012)

Right you are peterk.

I've always believed that democracy has the seeds of it's own financial ruin baked into it. When every citizen's vote counts the same, whether they contribute anything or not, and every politician needs to get reelected by promising more benefits and lower taxes, it amounts to a set of circumstances that will inevitably produce a financial doomsday machine. Back in the day, only property owners got to vote. Why? Because they were the ones who paid the taxes and it made perfect sense that they should be the ones who decided how those taxes were spent.


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## peterk (May 16, 2010)

^ Increase the voting age to 25 or maybe even 30; and require that you pay a minimum of ~$5,000 in income tax to get a vote... Boom. The government will fix itself within two elections.

I suppose I'll settle for a TFSA increase though :biggrin:


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## rhvic (Oct 7, 2014)

peterk said:


> ^ Increase the voting age to 25 or maybe even 30; and require that you pay a minimum of ~$5,000 in income tax to get a vote... Boom. The government will fix itself within two elections.
> 
> I suppose I'll settle for a TFSA increase though :biggrin:


That is certainly a bit restrictive! A few decades ago, someone informed me that if I did not have a mortgage, I should have no right to vote! Well, today I own my own home and do not have a mortgage - I guess I am no longer able to vote?

Better would be mandatory voting, as in a number of European countries. The voter turnout rate is pathetic today.

Of course, I'll take the TFSA increase as well, should it happen.


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## andrewf (Mar 1, 2010)

Why don't we just go back to feudal monarchy? The good ole days...


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## pwm (Jan 19, 2012)

Good ideas peterk. 

Or how about this: You get a "vote credit" from CRA. All eligible voters start with 1 credit. For every $5000 you pay in income tax your credits increase by 1. When the votes are tabulated, the credits are applied. Makes it more fair, and encourages paying your taxes.

I know, the government would hire 5,000 more unionized civil servants to administer it, and it would cost $100 million for a computer system that wouldn't work, and another $100 million in legal fees to fight the charter challenges.


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## sags (May 15, 2010)

TFSA increases and income splitting eh............

I think it will be hilarious watching the upcoming election campaign........with Harper fuming on the side, while the opposition parties roll out their plans to spend "his" surplus.

What Harper promises may pale in comparison to the election promises the Liberals and NDP offer to the voters.

Cash to spend ?............there will be an ever increasing ramp up of goodies leading to the election.

"We call your TFSA increases and income splitting, and raise you higher tuition credits and OAS benefits,........ and a cash rebate on a new car".


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## gt_23 (Jan 18, 2014)

gardner said:


> I haven't seen any discussion of this
> 
> http://news.nationalpost.com/2014/1...-tax-cuts-aided-by-shrinking-federal-deficit/
> 
> ...


The Government promised to double the limit when it moved back to balanced budgets. This Government generally adheres to their campaign promises (like them or hate them), and they are on track to balance on or before schedule, so you will probably see $10k TFSA next spring.


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## HaroldCrump (Jun 10, 2009)

"Doubling" should mean $11K...


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## tygrus (Mar 13, 2012)

I for one don't trust any govt program including this one. Name one program that didn't get changed eventually. EI, CPP, OAS, RRSP, GST, Income trusts.

I fully expect once there is a bunch of cash in those accounts someone will come into govt and it will be irresistible for them and it will be taxed or a penalty upon withdraw or something.


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## yyz (Aug 11, 2013)

HaroldCrump said:


> "Doubling" should mean $11K...


 I think when they first announced the doubling of the limit, $5000 was the limit at that time.I seem to remember the $10000 number 
In my opinion I think we will see an staged increase maybe to $7500 then a year or 2 later to $10000 to stretch out the goodies that will be promised come election time.Any increase will be appreciated.


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## carverman (Nov 8, 2010)

fraser said:


> I think that you can count on it. This plus other election goodies.
> 
> There will be a chicken in every pot and a pot on every stove come election time.


and that may be enough to get Harper back in again. But then, are there any other real choices out there? 
So far I don't see any..


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## carverman (Nov 8, 2010)

tygrus said:


> I for one don't trust any govt program including this one. Name one program that didn't get changed eventually. EI, CPP, OAS, RRSP, GST, Income trusts.
> 
> I fully expect once there is a bunch of cash in those accounts someone will come into govt and it will be irresistible for them and it will be taxed or a penalty upon withdraw or something.


How is it going to be taxed? It is a tax free savings account after all...if they ever start taxing it ,
then the gov't at that point will be blatantly deceiving us.


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## gt_23 (Jan 18, 2014)

carverman said:


> and that may be enough to get Harper back in again. But then, are there any other real choices out there?
> So far I don't see any..


Canada would be lucky to get Harper back for another 4, regardless of the alternatives.


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## HaroldCrump (Jun 10, 2009)

gt_23 said:


> Canada would be lucky to get Harper back for another 4, regardless of the alternatives.


But what about legalized pot?
Me want me pot :frown:


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## sags (May 15, 2010)

Harper could re-tread income sharing as another election promise.........but would people believe him this time around ?

We will see what the opposition parties propose to do with the surplus.

It has been a long time since Canada had a surplus.........and the politicians will be like kids in a candy store.

Then after the election it will be the same old story......oops, didn't calculate the budget right...we actually have a big deficit....sorry.

We have all seen this movie before.


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## GalacticPineapple (Feb 28, 2013)

gibor said:


> Also, about 6 years ago Harper promissed reduce GST by 1% annually. he did it for 2 years and stoped


If memory serves he promised to reduce it to its current level.


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## gardner (Feb 13, 2014)

HaroldCrump said:


> Me want me pot


In all seriousness, I am sick of having my tax dollars used to investigate, prosecute and incarcerate people for growing and smoking pot. Even selling it, absent some other problem like violence or something that would be prosecuted in its own right. A lot of places have become fed up with running this pointless and expensive campaign, including some US states and parts of the civilized world too. It's time.


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## HaroldCrump (Jun 10, 2009)

gardner said:


> In all seriousness, I am sick of having my tax dollars used to investigate, prosecute and incarcerate people for growing and smoking pot


And I am sick of having my tax dollars used to placate, enrich, and pump govt. backed public sector unions.
Govt. is engaged in a massive fake job creation program, and an egregious re-distribution of wealth.

Just this morning, the Ontario LCBO union wants the govt. to scrap the Agency Store Program, which is one small modicum of independent, private sector involvement left in the distribution supply chain.
Everything must be nationalized, unionized, and appropriated by the govt...funded by over-taxing so-called "rich" people.


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## JosephK (Nov 7, 2012)

I'd certainly take advantage of the additional room if they go ahead and do this, but doubling the TFSA is the last thing we need while our infrastructure is crumbling and half our navy is broken down and rusting away in port.


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## gibor365 (Apr 1, 2011)

JosephK said:


> I'd certainly take advantage of the additional room if they go ahead and do this, but doubling the TFSA is the last thing we need while our infrastructure is crumbling and half our navy is broken down and rusting away in port.


and why do we need navy?! To fight Cuba or Aruba?! btw, UK analog of TFSA allows to contribute more than 10 times than here , include Junior TFSA accounts and their Navy is not too bad


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## gibor365 (Apr 1, 2011)

HaroldCrump said:


> And I am sick of having my tax dollars used to placate, enrich, and pump govt. backed public sector unions.
> Govt. is engaged in a massive fake job creation program, and an egregious re-distribution of wealth.
> 
> Just this morning, the Ontario LCBO union wants the govt. to scrap the Agency Store Program, which is one small modicum of independent, private sector involvement left in the distribution supply chain.
> Everything must be nationalized, unionized, and appropriated by the govt...funded by over-taxing so-called "rich" people.


You're right! and definition of "rich" depends... Cuban or Dominican people would say that EVERYONE here is "rich"


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## HaroldCrump (Jun 10, 2009)

So the tax breaks season has been kicked off this afternoon by Prime Minister Harper with this following announcement:

*Child fitness tax credit to be doubled and made refundable*

As you can expect, there is a deluge of Harper-bashing and left wing tax-and-spend rhetoric in the comments section of this news announcement in various media websites.

I am a little bit surprised that Harper kicked off the announcements with this one instead of the TFSA doubling, if that is still on that is.


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## Synergy (Mar 18, 2013)

HaroldCrump said:


> I am a little bit surprised that Harper kicked off the announcements with this one instead of the TFSA doubling, if that is still on that is.


I'm not surprised, there's more families looking to find ways to cut costs / save a few dollars then their are asking Santa to double their TFSA yearly contribution limits. Fitness is also somewhat "on trend" these days. Here's to hoping that the TFSA is still on the list!


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## andrewf (Mar 1, 2010)

I think it will still be too late for Harper to save his job a year from now. I suppose you can't fault him for trying.

Shame he doesn't intend to repay the debt he's racked up over his tenure.


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## sags (May 15, 2010)

Oh I see what he is doing here..........

It is the old Wimpy routine........."I will gladly pay you Tuesday for a hamburger today" routine.


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## HaroldCrump (Jun 10, 2009)

Synergy said:


> I'm not surprised, there's more families looking to find ways to cut costs / save a few dollars


Absolutely ! People have to find a way to offset the massive tax increases (at the provincial level), and the raging inflation in essential goods and services like gasoline, hydro, and food.



> Here's to hoping that the TFSA is still on the list!


I hope so too.
It would be a massive let-down if the TFSA doubling is scrapped because the tax-and-spend zealots are baying for the blood of the so-called "rich people" living all over our country.


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## the-royal-mail (Dec 11, 2009)

HC for PM. :eagerness:


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## carverman (Nov 8, 2010)

HaroldCrump said:


> But what about legalized pot?
> Me want me pot :frown:


We are starting to see a trend of increased accidents due to texting while driving, in spite of current traffic laws and fines.
Can you imagine the chaos on the streets and highways with all the potheads out there..it would be worse than drunken driving.

"NOT NEWS STORY" AFTER LEGALIZED MARIJUANA ALLOWED IN CANADA
"I was driving along and decided to light up a joint...took a few drags and then....CRASH!!!..
I guess I drifted off. lost control of my limbs..and now I ended up with no limbs and dependent on welfare
to look after me.. Ok, I guess I need a fundraiser set up for an artificial arm to light and hold my joints"...
hurrah for "Prime Minister" Trudeau!:rolleyes2:


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## cashinstinct (Apr 4, 2009)

Will a pot legalization give me a higher TFSA increase? I am confused ! (Not buzzed, simply confused! :stupid: )


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## Beaver101 (Nov 14, 2011)

cashinstinct said:


> Will a *pot legalization *give me a higher TFSA increase? I am confused ! (Not buzzed, simply confused! :stupid: )


 ... I don't think so, but it may give you a high and in which case you'll want to ask for a higher TFSA ... hope this is clearer now. :biggrin:


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## Toronto.gal (Jan 8, 2010)

carverman said:


> "I was driving along and decided to light up a joint...took a few drags and then....CRASH!!!..
> I guess I drifted off. *lost control of my limbs.*...


How about control of your memory?

'Boston Bomb Suspect’s Friend Uses Marijuana Defense....This case is going to be about the effect of marijuana and memory....'


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## HaroldCrump (Jun 10, 2009)

Those that think legalizing pot will magically generate billions of $ in tax revenue, which can be used to provide social services, alleviate poverty, build infrastructure, etc. are deluding themselves.
No such thing will happen.

Whatever additional tax revenue is generated will firstly get gobbled up by new ministries, agencies, departments, regulatory bodies, etc. set up to administer, manage, and regulate the legalized pot industry.
Each of those staffed with Sunshine List level civil servants, bureaucrats, and new cabinet positions.

Whatever tax revenue is left (if any) will disappear down the black hole of govt. spending on placating and pumping their favorite vote banks and lobby groups.

Not one new social service will be created, not one service improved, no new bridge, road, dam, port, etc. will be built.

A few years later, we will start talking about regulating the use of cocaine and meth.


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## carverman (Nov 8, 2010)

cashinstinct said:


> Will a pot legalization give me a higher TFSA increase? I am confused ! (Not buzzed, simply confused! :stupid: )


Ok, some clarification is in order here..how did I get on the legalized marijuana topic in this thread? 

It spun off the rumour that the TFSA *could* be increased to $10k per year as a carrot to get Harper elected. The alternatives to Harper are the NDP and of course Justin Trudeau that had been promoting the legalizing of marijuana in his 'promotional appearances" over the last couple of years. 

Snippets of his public speeches aired by the media, give us the impression he was all for it and that other than legalizing pot, the Liberals don't have too much to offer the Canadian taxpayer right now, just a bunch of back benchers.
The latest issue was Justin's opposition against getting involved in a combat role sending our military over to bomb ISIS.

So, I was just trying to imagine a "hypothetical and future" scenario in Canada where Justin becomes PM, cuts military spending even more, and somehow through a narrow vote margin in the H of C, decriminalizes marijuana..and the Liberal stacked Senate agrees to pass the marijuana bill, making it available in corner stores like cigarettes, taxed by the gov't naturally...(good source
of income to pay down the deficit) :biggrin:

Imagine the joyful cries of the people...everybody driving around high..why would anybody be concerned about the price of gas or the TFSA increase that Harper proposed at that point? 

Back to the original topic....:biggrin:


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## carverman (Nov 8, 2010)

Toronto.gal said:


> How about control of your memory?
> 
> 'Boston Bomb Suspect’s Friend Uses Marijuana Defense....This case is going to be about the effect of marijuana and memory....'


Not sure what kind of trouble you can get into still being high in the workplace..it takes a few hours for the effects to wear off..so driving into work could be a real challenge of trying to sort out what is reality...
floating off into space at 100kph....and can't concentrate enough to apply the brakes properly...

lets' hope that the $10K TFSA will become more of a reality than the other scenario for Canada.


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## HaroldCrump (Jun 10, 2009)

carverman said:


> Not sure what kind of trouble you can get into still being high in the workplace..


Immediate firing for cause.
Not eligible for EI.


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## Plugging Along (Jan 3, 2011)

You won't get fired if your pot use it considered an addicts which is a disability or something silly like that. Because you just can't help yourself.


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## Toronto.gal (Jan 8, 2010)

Pluto said:


> Whens the next *election?* That could be a clue.


Sure it's a clue, but wasn't same election the reason JT told us about how his thinking on pot laws had evolved over the years? His admission to smoking it was also no accident. 

On the TFSA, I agree with another poster, who believes that an increase will likely be staged.


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## Toronto.gal (Jan 8, 2010)

Plugging Along said:


> You won't get fired if your pot use it considered an addicts which is a disability or something silly like that. Because *you just can't help yourself*.


That's right. 

Addictions = popular defense strategies by defendants & lawyers these days....from gambling addiction, to sex, you name it. But this is really off-topic.


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## steve41 (Apr 18, 2009)

I have often wondered about the effect the TFSA has on the treasury. Think about it.... rather than having to pay back RRSP deductions, the feds won't be paying out those deductions if the individual is investing in his TFSA rather than his RRSP. Granted, this will effect tax revenue way down the road, but who cares?.... the current govt players will all have died or retired.

I am sure I am missing something.


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## Eclectic12 (Oct 20, 2010)

Using after tax dollars to fund the TFSA and ignore the RRSP (where contribution room is available & a refund would be received) likely means that more income tax is collected today for the gov't. This is in addition to not having to provide a refund.

The trade off is that the growth in the TFSA is tax free (as well as any withdrawals). In retirement, there may be less income tax collected as there's less being withdrawn from the RRSP as income.


How it all plays out is going to depend on what one assumes and how well the investments do.


Cheers


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## My Own Advisor (Sep 24, 2012)

"The trade off is that the growth in the TFSA is tax free (as well as any withdrawals)."

Yes, but most Canadians cannot and won't be able to max out their TFSA. I mean, up until a few years ago, most people didn't know you could invest in stocks within a TFSA.


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## andrewf (Mar 1, 2010)

TFSA is also going to make GIS unsustainable. We will need to introduce an asset test or at least make anyone with a positive TFSA balance ineligible.


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## yyz (Aug 11, 2013)

And what do you mean by a "positive TFSA balance" ?


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## cashinstinct (Apr 4, 2009)

yyz said:


> And what do you mean by a "positive TFSA balance" ?


he means someone who has a TFSA and has money / stocks / other investments in it.

It's a theory, that future government could refuse benefits to people based on their TFSA balance.


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## carverman (Nov 8, 2010)

Plugging Along said:


> You won't get fired if your pot use it considered an addicts which is a disability or something silly like that. Because you just can't help yourself.


Using pot is still drug use now, even if it's medically prescribed for some. Many companies take that seriously. Of course if you are on prescription drugs, then that's different story...but some of them are quite potent like FENTANYL, which many teens have bought on the street, scraped out the narcotic and overdosed, some even died from from it.

It's a known fact that marijuana around the time it is smoked can cause some brain dysfunction (while high) and depending on how much is smoked, some peripheral control issues for driving and operating machinery that can injure you.

I don't know how the authorities would treat an industrial accident that was blamed on marijuana use if it was legalized..that is a future scenario, 
but then smoking tobacco is legal, but at the same time many cities have ant-smoking bylaws.

*On another note.*..the federal NDP are starting to come up with pre-election strategies, mulling over whether national daycare program would be feasible.
It was proposed a couple of elections ago, but the Harper gov't decided it would be too expensive, scrapped it, and 
implemented the NCB/CCTB) (National Child Benefit/ Canada Child Tax Benefit) which has family income and tax implications. 
http://www.nationalchildbenefit.ca/eng/06/cctb_children.shtml



> "In 2014, it’s unacceptable that many families have to pay more for child care than they do for rent. The NDP is determined to propose a practical plan to address the needs of parents across Canada," party leader Thomas Mulcair said in a statement earlier this week.





> The federal government has to be an active partner with provinces in order to help parents. After 30 years of Liberals and Conservatives promising and yet failing to deliver, the NDP isn’t waiting until the next election. In the coming weeks, we will be announcing the details of a national child care program that an NDP government will put in place."


Hmmm..rumours of a national daycare program? 
If that is true, how are many families managing to survive out there?
and 
Would an increase in the TFSA from $5500 to (rumoured ) $10,000 help them?


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## sags (May 15, 2010)

Didn't the Ontario Liberals promise a healthy raise for all daycare workers in Ontario ?

A national daycare program could get expensive..........but if it was paid for by the federal government........it would ease the cost for Ontario.

I am guessing it really doesn't matter, as the NDP have no chance of winning.

Their support is going to the Liberals, as some of the union leaders have stated recently.

It is going to be an all out "stop Harper" campaign........similar to the "stop Hudak" campaign in Ontario.


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## carverman (Nov 8, 2010)

sags said:


> I am guessing it really doesn't matter, as the *NDP have no chance of winning.*
> 
> Their support is going to the Liberals, as some of the union leaders have stated recently.
> 
> It is going to be an all out "*stop Harper" campaign*........similar to the "stop Hudak" campaign in Ontario.


They tried that last election ago and he still got a majority...the problem is that even IF you stop Harper and his neoCons,
who are you going to vote in that will do any better? 

The 2011 election.
The NDP..as we all know, the ONLY reason they got to be the official opposition, is because of Layton's popularity in Ontario and the protest vote in Quebec against the BLOC, and their subsequent demise. 
The NDP being a socialist party backed by the unions mostly have no interest in promoting business or war..they hate both and would rather grab as much as they could from established business forcing the business to go elsewhere. The business establishment has
no reasons to vote the NDP in, even if the unions are all for them.

And finally the Liberals..they tried, they really tried hard in the last two elections..
"Ignatieff" was recalled from Harvard, and others after he quit.. and none of them really had much to say
about what they could do for Canada, now it's Mr Trudeau from Quebec riding on his father's coat tails.
"Don't bogart that joint my friend..pass it over to me.":biggrin:


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## HaroldCrump (Jun 10, 2009)

carverman said:


> In 2014, it’s unacceptable that many families have to pay more for child care than they do for rent.


I do not understand the correlation between rent and child care costs.
It would make more sense for the NDP to legislate something like - _"In 2014, it’s unacceptable that many families have to pay more for mortgage than they do for rent."_
Or,
_"In 2014, it’s unacceptable that many families have to pay more for food and hydro than they do for rent."_
Or,
_"In 2014, it’s unacceptable that many families have to pay more for vacations than they do for rent."_

If you ask me, _"In 2014, it’s unacceptable that many families have to pay more than 10% top marginal tax rates"_ :biggrin:



> The NDP is determined to propose a practical plan to address the needs of parents across Canada," party leader Thomas Mulcair said in a statement earlier this week


Their proposal has nothing to do with addressing _the needs of parents across Canada_.
If they cared about the needs of parents, they should support the doubling (or even tripling) of the child fitness credit, they should support income splitting for single income households, they should demand doubling of the RESP, etc.


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## carverman (Nov 8, 2010)

HaroldCrump said:


> I do not understand the correlation between rent and child care costs.
> It would make more sense for the NDP to legislate something like ....
> 
> *Their proposal has nothing to do with addressing the needs of parents across Canada*.
> If they cared about the needs of parents, they should support the doubling (or even tripling) of the child fitness credit, they should support income splitting for single income households, they should demand doubling of the RESP, etc.


Smoke and mirrors. That is why the NDP won't get a majority in the next election, so Mulcair can say what ever he wants.


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## Covariance (Oct 20, 2020)

MrBlackhill said:


> It should've been rounded up to $6,500 due to inflation. The initial $5,000 back in 2009 is now worth $6,278 in 2021 and they decided not to round it up to $6,500 for 2022. I guess they don't want people to save more.


They don’t want to lose the tax. The TFSA is a powerful tax saving vehicle. From their perspective that is revenue leakage.


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## MrBlackhill (Jun 10, 2020)

Exactly.


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## james4beach (Nov 15, 2012)

MrBlackhill said:


> The initial $5,000 back in 2009 is now worth $6,278 in 2021 and they decided not to round it up to $6,500 for 2022. I guess they don't want people to save more.


Sees like splitting hairs here. The current inflation adjusted value is just on the threshold, and whether you get the $500 now or next year won't make much of a difference in the big scheme of things.

We should consider ourselves lucky that we're getting the inflation adjustment at all. It's also somewhat of a miracle that the TFSA scheme hasn't been capped in some way yet.


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## doctrine (Sep 30, 2011)

james4beach said:


> Sees like splitting hairs here. The current inflation adjusted value is just on the threshold, and whether you get the $500 now or next year won't make much of a difference in the big scheme of things.
> 
> We should consider ourselves lucky that we're getting the inflation adjustment at all. It's also somewhat of a miracle that the TFSA scheme hasn't been capped in some way yet.


It's somewhat of a miracle that it hasn't been rescinded. Governments spent themselves out and are going to be on the hunt for "revenue sources". Cue study that shows that only people who work hard and save money have TFSAs and "can afford to give a little more".

If inflation and the TFSA do continue, TFSAs are going to be at $7000 soon. 5% inflation on $6278 is $6600 and so maybe 2024 could be $7000 a year.


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## Covariance (Oct 20, 2020)

james4beach said:


> Sees like splitting hairs here. The current inflation adjusted value is just on the threshold, and whether you get the $500 now or next year won't make much of a difference in the big scheme of things.
> 
> We should consider ourselves lucky that we're getting the inflation adjustment at all. It's also somewhat of a miracle that the TFSA scheme hasn't been capped in some way yet.


Agreed. It's a great program we should all be thankful for.

Some numbers show the value of that one $500 payment. Assume; $500 today, tax rate 45% (all periods), pre tax return of 10% and 20 year holding period.
Future Value;
Non-registered $1459
TFSA $3,364


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## MrBlackhill (Jun 10, 2020)

Covariance said:


> Agreed. It's a great program we should all be thankful for.


*It's a program *all the rich* should be thankful for.


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## Eder (Feb 16, 2011)

MrBlackhill said:


> *It's a program *all the rich* should be thankful for.


Its a program for those that wish to be rich. Rich people dont need a TFSA but working people need to start contributing $100/week once they are in their 20's. Thats like 1 avocado toast or full meal deal/day. Groeth & compounding will easily make you rich by 65.


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## MrBlackhill (Jun 10, 2020)

Eder said:


> Rich people dont need a TFSA


Rich people can do maximum contribution every year all in stocks and use it as a savings account and then withdraw their huge gains tax-free whenever they want for travels, renovations, buying a new property, buying luxuries, etc. And they keep maxing it out every time easily and get easy tax-free gains. They can afford to play the market inside their TFSA.

Poor people can't contribute the maximum and anyways since they are poor they don't save that much taxes because they don't pay lots of taxes and also they can't afford to take risk so they don't invest as much in stocks because they need to build an emergency fund, etc.

I pretty sure the median Canadian can't max his TFSA.


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## Eder (Feb 16, 2011)

If you make 4k/month theres no excuse not to forgo a hoppy craft beer/day to feather your retirement. If you make less than 4k/month get a better job. No excuse not to put some money aside every month.


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## MrBlackhill (Jun 10, 2020)

Eder said:


> If you make less than 4k/month get a better job.


We'd have an issue in Quebec. All the elementary and secondary school teachers and child care providers would resign.


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## Eder (Feb 16, 2011)

Guess they could relocate easily...In Alberta, Elementary school and kindergarten teachers earn an average of $44.68/hour or $77,661.00/year. . Secondary school teachers earn an average of $50.23/hour. Poor peasants.

Child care provider is another name for a babysitter...move up to flipping burgers.


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## gardner (Feb 13, 2014)

Eder said:


> Rich people dont need a TFSA


I agree. Even for the urban professionals the TFSA amounts are pretty small potatoes compared to RRSP limits of $27,830 this year. For someone who is truly rich, it is chump change.


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## james4beach (Nov 15, 2012)

Sounds like @Eder and @gardner are describing a nice way to limit the cost / lost revenue of the TFSA program. Since very rich people don't need it anyway, discontinue new contributions for anyone who makes (let's say) over 200K annual employment income. That would take care of Bay Street bankers etc.

Then only poorer people and middle class could add to TFSAs. They are the ones who really need this anyway. And it would lock out the rich people, who are also the most likely to game or abuse the structure by doing things like professional-level active trading.

What do you think @MrBlackhill ?


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## KaeJS (Sep 28, 2010)

I think people would snap if they stopped the TFSA.
I personally don't think they will change it. Nobody wants to be the bad guy. Politicians are about virtue signaling and popularity.


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## james4beach (Nov 15, 2012)

KaeJS said:


> I think people would snap if they stopped the TFSA.


Oh yes I forgot, we wouldn't want to inconvenience the super rich. What was I thinking.


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## KaeJS (Sep 28, 2010)

As mentioned upthread...
Do you think the ultra rich really care about less than 100k of tax free contributions?

I'm sure they use it. But the TFSA is not meant for those people. The TFSA is one of the very few things the middle class has.

The ultra rich don't need it.
The poor can't take advantage of it.
The TFSA is mainly for middle class folk.


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## MrBlackhill (Jun 10, 2020)

KaeJS said:


> The ultra rich don't need it.





KaeJS said:


> Do you think the ultra rich really care about less than 100k of tax free contributions?


That's why @james4beach said only the rich (over $200k income for instance) wouldn't have access to the TFSA, because anyways they don't need it and they don't care.


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## londoncalling (Sep 17, 2011)

...


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## Eder (Feb 16, 2011)

At any rate making $200k/year is a useless metric when rooting out rich people to appease the weakest generation.


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## damian13ster (Apr 19, 2021)

Administrative costs of such change would be much higher than any savings. TFSA is chump change when it comes to taxation. RRSP would be much more obvious target


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## peterk (May 16, 2010)

Why even say the 200k J4B? - That's not rich and you know it, it's upper middle class.

Upper middle class people drive the economy and are the ones doing all the innovation and doing/promoting productive works. Successful people making 100k-$1M/yr. Small business owners, entrepreneurs, and the top people who are employee at corporations. This group, the 10%, makes the world go round, why are they being punished endlessly?

Benefits of all kinds are clawed back from the upper middle class, starting around 100k and finished around 200k, while their tax rates concurrently goes straight up, peaking somewhere above 200k. This makes no sense, as these people are in a growth phase of their career and aren't super old yet or entrenched in whatever economic activities they're in. They could bail if conditions get too bad... they could leave the workforce or leave Canada.

Meanwhile the actual rich - $1M+ earners, are old, can't leave Canada because they're either top dogs at big companies or own their own business, in Canada - yet the threat is constantly "don't tax the rich or they'll just leave Canada". That's a joke, conservative propaganda, if you will.

The upper middle class deserves the TFSA, while the actual rich don't, but they only make up <0.5% anyways so it doesn't really matter and tweaking the system wouldn't do anything.

After it's spending problem, the government has a taxing the upper-middle class problem. They both will be getting worse, instead of better, I'm predicting, since propaganda has so effectively divided the populace into welfare socialists with no dreams and big-business useful idiots.


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## OptsyEagle (Nov 29, 2009)

The true definition of rich is the difference between them and the poor. $200,000 per year is indeed rich, in any local or international comparison I ever did. Most likely for those people, not rich enough, but that is a personal issue and not something the majority of people, who do not earn that high of income would or should be concerned about.

As for the TFSAs not being useful for rich people, that is incorrect. They are less useful for rich people but everything that saves taxes is useful and most likely used. As already stated, taking the TFSA away from them would be cumbersome, and more important, too exclusionary for the small benefit it would make.

A TFSA "equally" allows each Canadian to shelter a certain amount of money. What we are arguing about here is not the fairness of TFSAs, but the fact that one group of Canadians do not have the money to take advantage of it and another have way too much money for it to put a real dent in their tax problem. I wouldn't waste time and political ammunition touching it, if I were making these decisions.


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## james4beach (Nov 15, 2012)

peterk said:


> Why even say the 200k J4B? - That's not rich and you know it, it's upper middle class.


200K gross income is above upper middle class. I'm not talking household income but individual income. Maybe you don't like the term "rich" but these people are very well off.

The median income in this country is around 60K for people over age 30, so these are in the prime working years. Anyway my point is that it makes sense to reduce freebie government handouts to people who are very well off. We already do that for other government programs of course. I'm just saying it can be extended to the TFSA as well.

*Look at the US for example*: the TFSA program is very similar to the Roth IRA. South of the border, the gross income must be under 140K for a person to be allowed to contribute to their TFSA (Roth IRA).

Currently the Canadian TFSA program is even more generous than the US equivalent. Clearly others have thought about what I'm saying, and implemented it, long ago.


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## james4beach (Nov 15, 2012)

Here is what the stingy Americans have decided to do with their version of the TFSA program. Pretty surprising that here in Canada, we're being more generous to the rich than the Americans are. Notice that the US threshold is well under the amount I suggested!

It's just common sense.


To contribute to a Roth IRA in 2022, single tax filers must have a modified adjusted gross income (MAGI) of $144,000 or less, up from $140,000 in 2021. If married and filing jointly, your joint MAGI must be under $214,000 (up from $208,000 in 2021).

Annual Roth IRA contribution limits in 2021 and 2022 are the same as traditional IRAs:

$6,000 for people under 50.


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## m3s (Apr 3, 2010)

@KaeJS is right the rich don't care about TFSAs or the american version

The rich can invest in foreign countries in exchange for tax residency, set up off shore LLCs, borrow against assets that get depreciated on paper etc etc. I've looked into this stuff and it's mind blowing genius and of course no politician will touch it

I'll happily give up my TFSA to move my tax residency to a more tax favorable country


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## peterk (May 16, 2010)

james4beach said:


> 200K gross income is above upper middle class. I'm not talking household income but individual income. Maybe you don't like the term "rich" but these people are very well off.
> 
> The median income in this country is around 60K for people over age 30, so these are in the prime working years. Anyway my point is that it makes sense to reduce freebie government handouts to people who are very well off. We already do that for other government programs of course. I'm just saying it can be extended to the TFSA as well.


Sounds like you're still in the early 2000s J4B. I'm not sure how you define the classes, but no it's not, and no they're not. 200k income is a threshold income, I'd say, for the start of the upper middle class. The group that can afford, at present day, some luxuries like nicer vehicles, nicer homes, a vacation home, enrichment for children, and nice holidays. Good luck doing that for less than $200k, starting income.

I base this on lifestyle affordability, not comparison to other income levels. If the median income >30 is really $60k (sounds low - that's _working people_ above 30, or all people?) then it just goes to show that having a decently job doesn't make you middle class anymore, but part of the struggling working class, and there are fewer middle class and fewer upper-middle class as a result. Government and corporate collusion has wrecked the middle class and driven many would be upper-middle class (probably the people you're thinking about making $100k+) into the regular middle class lifestyle level.

My point being, all the clawback levels are getting more and more skewed with increased costs of living everywhere. And that 200k is no longer squarely among "the rich". There are a whole bunch of people making $100k-$1M that are getting targeted for taxation and benefits clawbacks that don't deserve it, IMO. Particularly since this group is who holds our complex economy together (Middle management and technical experts in all fields).


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## Mechanic (Oct 29, 2013)

When can we actually put the $6k per account into the TFSA for 2022 ?


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## Beaver101 (Nov 14, 2011)

^ January 1st, 2022 at earliest for "year 2022 of *new contributions of $6,000*".

*Add:* Ponderling is right - laser focused strike at midnight of January 1st, 2022. I take my sweet teeth time with my contributions. First, gotta come up with the money, and then need to decide where to allocate it. Stocks, ETFs, GICs, decisions, decisions, decisions.


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## Ponderling (Mar 1, 2013)

I usually make mine the first day of the new year when a bank is open. Just my guideline. 
Could be 12:01am Jan 1 I guess.


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## Money172375 (Jun 29, 2018)




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## Money172375 (Jun 29, 2018)

I can tell you that working at a bank from 1997-2019…..I probably only saw a few dozen individuals making over $100k. And even rarer was a married couple making over $200k.
and I spent 20 years at GTA branches.


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## nathan79 (Feb 21, 2011)

peterk said:


> Sounds like you're still in the early 2000s J4B. I'm not sure how you define the classes, but no it's not, and no they're not. 200k income is a threshold income, I'd say, for the start of the upper middle class. The group that can afford, at present day, some luxuries like nicer vehicles, nicer homes, a vacation home, enrichment for children, and nice holidays. Good luck doing that for less than $200k, starting income.
> 
> I base this on lifestyle affordability, not comparison to other income levels. If the median income >30 is really $60k (sounds low - that's _working people_ above 30, or all people?) then it just goes to show that having a decently job doesn't make you middle class anymore, but part of the struggling working class, and there are fewer middle class and fewer upper-middle class as a result. Government and corporate collusion has wrecked the middle class and driven many would be upper-middle class (probably the people you're thinking about making $100k+) into the regular middle class lifestyle level.


There's definitely a lot of confusion between "middle income" and what we consider to be "middle class". It used to be that middle income WAS middle class, but I think we can put that idea to bed now. The middle class as we knew it 20-30 years ago barely exists now. Owning a detached home, a couple of newer vehicles and taking a vacation every year -- that requires a household income well above the median. Middle income people are the modern working class, and they are certainly not buying real estate in most urban and suburban areas. The "lower middle class" is yet another outdated concept -- they are the "working poor" now.

The sweet spot where you really want to be is at least 150K-200K household income, or else have 2-3 million in assets. I would call this high income or well-off, but not rich. You need at least 5 mil net worth to be rich, and probably more in the larger urban centres.

I grew up lower middle class, so it hurts to realize this. But if you want to have a comfortable life in Canada, you really need to up your game. Being "middle income" just won't cut it if you want to do more than simply exist.


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## doctrine (Sep 30, 2011)

peterk said:


> Sounds like you're still in the early 2000s J4B. I'm not sure how you define the classes, but no it's not, and no they're not. 200k income is a threshold income, I'd say, for the start of the upper middle class. The group that can afford, at present day, some luxuries like nicer vehicles, nicer homes, a vacation home, enrichment for children, and nice holidays. Good luck doing that for less than $200k, starting income.
> 
> I base this on lifestyle affordability, not comparison to other income levels. If the median income >30 is really $60k (sounds low - that's _working people_ above 30, or all people?) then it just goes to show that having a decently job doesn't make you middle class anymore, but part of the struggling working class, and there are fewer middle class and fewer upper-middle class as a result. Government and corporate collusion has wrecked the middle class and driven many would be upper-middle class (probably the people you're thinking about making $100k+) into the regular middle class lifestyle level.


Absolutely. With a $100k income, you will absolutely struggle with a home, 1-2 vehicles, and some kind of extra lifestyle, like a cottage, big annual holidays, or whatnot. Impossible in any top 20 city in Canada, maybe not even possible in a small city these days with the same income. That stuff was easy typical middle class for baby boomers 20-30 years ago. Maybe it wouldn't be the fanciest vehicle, or a luxury cottage, but a lot of people had something and that was middle class life. Now, you definitely need to have two $100k family salaries to have that kind of life. And you still might be cutting it close.

The Roth IRA cutoff of $140k US income will also buy you as much or more than $200k of Canadian income, regardless of the currency exchange. More like $250k once you compare local purchasing power.

So TFSAs could be cutoff at $250k income. Could make sense. But again, to what gain, other than spite or principle? If you added up the total TFSAs of $250k income earners, and then looked at the potential tax gains by taking capital gains or taxing dividend income, I am sure you are looking at peanuts. It is going to cost you more to write and administer the law. Almost certainly, CRA would have a better ROI going after tax cheats than squeezing peanuts.


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## gardner (Feb 13, 2014)

Mainly, this thread has revealed that folks have broadly varying ideas of what "rich" means.



nathan79 said:


> at least 150K-200K household income, or else have 2-3 million in assets


This is sort of what I was thinking -- I would put it at (1) income just into the top tax bracket -- $220K; and/or (2) assets that throw off income in this range -- say $5.5M @ 4% --> $220K. Less than that is "not rich" but is likely on the very upper end of middle class.

Obviously many here disagree.


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## MrBlackhill (Jun 10, 2020)

peterk said:


> I'm not sure how you define the classes, but no it's not, and no they're not. 200k income is a threshold income, I'd say, for the start of the upper middle class.


I'm curious how you get to this, I'm pretty sure you believe people are making much more than they actually do.

Look at this data.




__





Upper income limit, income share and average income by economic family type and income decile


Upper income limit, income share and average of market, total and after-tax income by economic family type and income decile, annual.




www150.statcan.gc.ca





The top 10% richest make an after-tax income of "only" $102,200. So, yes, a pre-tax income of $200k is the richest people in Canada.


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## AltaRed (Jun 8, 2009)

Interesting how perception is so disconnected with reality (StatsCan data). The numbers don't lie and if one digs even further into first declle, top quartile, etc. it will (should) reset misconceptions.


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## Gator13 (Jan 5, 2020)

According to the 2019 stats (if I am reading them correctly), the individual income threshold for the top 1% is $250k and the average for the top 1% is $513k. Median age is 53.

Of course plus/minus when drilling down further to a Province/City level. I suppose the numbers should be increased 10% to 15% to adjust to 2021 dollars.

The 0.1% is where the real money is.


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## OptsyEagle (Nov 29, 2009)

In my opinion, rich is simply not worrying about acquiring food this week or paying the rent. The ability to take a vacation to a warmer climate in the winter. A reasonably new car with a full tank of gas in it. That type of thing. If a person who makes $200,000 per year cannot come up with the rent for next month, that is solely due to the behavior of that individual, certainly not the statistic.

We are certainly quite the spoiled group of people if we think that $200,000 per year is not rich.


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## peterk (May 16, 2010)

MrBlackhill said:


> I'm curious how you get to this, I'm pretty sure you believe people are making much more than they actually do.
> 
> Look at this data.
> 
> ...





AltaRed said:


> Interesting how perception is so disconnected with reality (StatsCan data). The numbers don't lie and if one digs even further into first declle, top quartile, etc. it will (should) reset misconceptions.


Hang on - I know I'm just a high income Alberta guy - out of touch etc. - but what gives with this data and why are you all interpreting it like you are?

Could the forum wise please clarify? Why did you quote "persons not in an economic family" that you did for 102k? That is largely going to be young single people in early career. Why not "Economic families" at 234k? or just everyone, families and singles for $210k?

So top 10% of all economic family units, single or couples (and not both in a couple work, by a long shot) is $210k, 9th decile is 130k...

Then the top 20% of Canadians, with many young singles, and many 1 salary working family with 2 adults, has an average of $170k income? and you're all claiming that 200k is squarely in the rich??

So 1/5 or 1/10 families should have their taxes jacked up and benefits removed, TFSA revoked?

And my point was not to squabble about the stats anyways... but to point out that if someone is being clawed back benefits, yet they can't even afford an upper-middle class lifestyle like so many more families have been able to several decades ago, then what exactly is going on with targeting this group of people for further taxation instead of the actual rich? I suggest the answer is because the middle class and upper-middle class has no voice anymore in politics - overwhelmed by the voice representing the apparently downtrodden, and the voice representing the rich and big business.


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## doctrine (Sep 30, 2011)

MrBlackhill said:


> I'm curious how you get to this, I'm pretty sure you believe people are making much more than they actually do.
> 
> Look at this data.
> 
> ...


Does this take into account unreal real estate gains being experienced by a majority of Canadians who are homeowners? With unrealized gains, actual wealth creation is much more than it appears on your tax bill. Anyone with a house these days, anywhere in Canada, is clocking in an extra $50-100k minimum a year of equity on top of an average $60k wage every year. And while it's not income, Canadians can and are accessing it through home equity loans. Kind of like the ultra rich who borrow against their equities, yes? Anyway, taking this into account certainly drives up the average purchasing power far, far beyond the average income, by as much as 100% and more for millions and millions of Canadians. Just food for thought. The true middle class is far more reflective of the $100k+ level than below. Canadians aren't as poor as you might think.


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## MrBlackhill (Jun 10, 2020)

peterk said:


> Why not "Economic families" at 234k? or just everyone, families and singles for $210k?


Well then most economic families have two people working so $234k divided by 2 equals $117k on average by person inside an economic family at the top 10% richest, which is not far from $102k for people who are alone.

And that's after-tax and in all cases that means $200k pre-tax is in the top 10%.




doctrine said:


> Does this take into account unreal real estate gains being experienced by a majority of Canadians who are homeowners? With unrealized gains, actual wealth creation is much more than it appears on your tax bill. Anyone with a house these days, anywhere in Canada, is clocking in an extra $50-100k minimum a year of equity on top of an average $60k wage every year. And while it's not income, Canadians can and are accessing it through home equity loans. Kind of like the ultra rich who borrow against their equities, yes? Anyway, taking this into account certainly drives up the average purchasing power far, far beyond the average income, by as much as 100% and more for millions and millions of Canadians. Just food for thought. The true middle class is far more reflective of the $100k+ level than below. Canadians aren't as poor as you might think.


In all cases, the richest will take even more advantage of leverage compared to the poor. So the conclusion would be that the rich are even richer than their tax bills.

But anyways we were only debating on the income of the rich (the one on the tax bill).

The debate was not whether Canadians are poor, but whether Canadians making $200k are rich. And if we take into account the leverage from home ownership of those making $200k, then they are even richer. Canadians making $200k are definitely above the upper middle class. They are in the top 10%.


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## peterk (May 16, 2010)

MrBlackhill said:


> Well then most economic families have two people working so $234k divided by 2 equals $117k on average by person inside an economic family at the top 10% richest, which is not far from $102k for people who are alone.
> 
> And that's after-tax and in all cases that means $200k pre-tax is in the top 10%.
> 
> Canadians making $200k are definitely above the upper middle class. They are in the top 10%.


I don't think that's a "divide by 2" situation at all. Many families only have 1 income, and the highest decile probably has more 1 income households than the 5-9 deciles do (they can afford it). Plus family benefit clawback happens for family income, not individual (probably not what we're talking about with this TFSA limit proposed).

I didn't realize that's after tax - but are you suggesting that that is making your point stronger?? - if it's after tax then the pre tax income is significantly higher, which means that 200k as a "rich" threshold is encompassing even more people, and is even more out to lunch with the concept of taxing away benefits from a large number of the population...

I think we have different definitions... being in the top 10% percent is clearly not "above the upper middle class".

I'm suggesting the upper middle class _barely_ starts at the 10%, around 150-200k.

Agreed that assets held make this all very convoluted and hard to digest. I try to picture someone without very many assets, or the "normal" amount of assets (a reasonable home with a mortgage and a bit of savings, perhaps). Doing otherwise skews things too much.

There are a great many people out there, usually a bit older, with $100k income and $2M+ in real estate equity because they've been recklessly "investing" above their means, and perhaps a small stock portfolio and a DB pension coming their way soon, too.
I don't know what to make of those people as far as considering them as "rich" with their $100k income. Or how they should appropriately taxed or provided benefits in a fair way. It's complicated.


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## MrBlackhill (Jun 10, 2020)

peterk said:


> I don't think that's a "divide by 2" situation at all. Many families only have 1 income


Nope, we aren't in 1976 anymore. In 2015, 70% of families with at least one children were dual earners.





The rise of the dual-earner family with children







www150.statcan.gc.ca





This is what you are looking for. Look at the median employment income for the different cases. Dual-earners families have a total net income of about $100k. Single-earner families and lone-parent barely make $40k net income.




__





Single-earner and dual-earner census families by number of children


Families of tax filers; Single-earner and dual-earner census families by number of children (final T1 Family File; T1FF).




www150.statcan.gc.ca





And also to come back to @doctrine about net worth, here's more data.

Quintiles. The median net worth of *economic families and persons not in economic families* is $329,900




__





Assets and debts by net worth quintile, Canada, provinces and selected census metropolitan areas, Survey of Financial Security


This table contains 58320 series, with data for years 1999 - 2016 (not all combinations necessarily have data for all years). This table contains data described by the following dimensions (Not all combinations are available): Geography (20 items: Canada; Atlantic; Newfoundland and Labrador...




www150.statcan.gc.ca





As detailed here by age. We also see that *economic families and persons not in economic families* of age 55 to 64 have a median net worth of $690,000.





Total and median net worth by age and family type


none




www150.statcan.gc.ca





And here's the deciles.




__





Selected assets and debts by net worth deciles, Survey of Financial Security


Composition of assets (including Employer Pension Plans valued on a termination basis) and debts held by all family units, by net worth deciles, Canada and geographical regions of Canada.




www150.statcan.gc.ca


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## MrBlackhill (Jun 10, 2020)

peterk said:


> being in the top 10% percent is clearly not "above the upper middle class".


Well, middle is middle... Median means middle.

When you arrange income in quintiles, you have 5 categories of 20% each: the lower class, the lower middle class, the middle class, the upper middle class and the upper class, so the upper class is the top 20%.



> It is sometimes loosely described as those who are neither rich nor poor — or as individuals who are neither in the top 20 per cent nor the bottom 20 per cent of income earners.
> 
> There is no official definition.


Or you can use the OECD definition.



> The Organization for Economic Co-operation and Development (OECD) defines a member of the middle class as anyone who earns between 75 per cent and 200 per cent of median household income after tax.
> 
> Based on the most recent data available from Statistics Canada, in this country that means anywhere from about $45,000 to $120,000.


Whatever you try, you won't get to a definition where people earning $200k pre-tax aren't in the upper class. They definitely are.


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## MrBlackhill (Jun 10, 2020)

OECD tool:




__





Under Pressure: The Squeezed Middle Class | en | OECD


Middle-class households feel left behind and have questioned the benefits of economic globalisation.




www.oecd.org


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## nathan79 (Feb 21, 2011)

Middle income can actually be measured, but middle class is a social construct. What people view as middle class is far above the median income.


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## MrBlackhill (Jun 10, 2020)

nathan79 said:


> Middle income can actually be measured, but middle class is a social construct. What people view as middle class is far above the median income.


True.

It's a social construct because those who are already earning the top 20% income believe they aren't part of the rich because they keep comparing themselves to those who are even richer.

Personally, it's better to stick to some numbers, metrics and definitions, otherwise it's just a matter of perception.

How can people dare saying they "aren't rich" when they make more than twice the median income? It's a shame.
How can people dare saying they "aren't rich" when they make more than 90% of the population (top 10%)? It's a shame.

I understand there is no definition to "rich", but when you are part of those with the highest income, you are considered rich.

They are just greedy people stuck in materialism and comparison. They never feel like it's enough.

Think about this, on another forum, there's a young couple who managed to retire after only 9 years by earning a total net household income of less than $100k, saving most of their income and investing it properly during the bull market.


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## Money172375 (Jun 29, 2018)

doctrine said:


> Does this take into account unreal real estate gains being experienced by a majority of Canadians who are homeowners? With unrealized gains, actual wealth creation is much more than it appears on your tax bill. Anyone with a house these days, anywhere in Canada, is clocking in an extra $50-100k minimum a year of equity on top of an average $60k wage every year. And while it's not income, Canadians can and are accessing it through home equity loans. Kind of like the ultra rich who borrow against their equities, yes? Anyway, taking this into account certainly drives up the average purchasing power far, far beyond the average income, by as much as 100% and more for millions and millions of Canadians. Just food for thought. The true middle class is far more reflective of the $100k+ level than below. Canadians aren't as poor as you might think.


They’re clocking in equity assuming they aren’t borrowing more……which we know many are doing.


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## james4beach (Nov 15, 2012)

MrBlackhill said:


> How can people dare saying they "aren't rich" when they make more than twice the median income? It's a shame.
> How can people dare saying they "aren't rich" when they make more than 90% of the population (top 10%)? It's a shame.
> 
> I understand there is no definition to "rich", but when you are part of those with the highest income, you are considered rich.
> ...


I know about this mentality from having worked (in both Canada and the US) with people who made well over 150K and often above 200K.

Some of them don't realize where they sit in the statistical distribution, and they feel like they're pretty average. They look up to people with multi million $ lifestyles and feel sad that this is out of reach for them. In their minds, *that* is rich, but not them.

It's really sobering once you realize what is actually average / median in the country, both in terms of net worth and employment income.


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## OptsyEagle (Nov 29, 2009)

I always feel good when I turn on my kitchen faucet and fresh clean water comes out. Then I mosey on over to my oversized fridge and look at all the food. Add a safe home for you and your family and you are way ahead of billions of people on this planet. I am sorry, but that is rich.

If a person can't see that then I really wish the world would stop wasting $200,000 on them.


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## Gator13 (Jan 5, 2020)

From the G&M:









Billionaires’ household wealth surges by record amount during COVID-19 pandemic, says report


The World Inequality Report estimated that billionaires this year collectively own 3.5% of global household wealth, up from slightly above 2% at the start of the pandemic




www.theglobeandmail.com


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