Quote:
Originally Posted by edslunch
I don't think anyone is arguing against contribution room in general, it's just a question of balancing value with affordability. RRSP defer government tax revenue until they are cashed, but TFSA eliminate it altogether so there is a significant cost in terms of lost taxes. Is that money better spent (or in this case not collected) for a relatively small number of people who can take full advantage of TFSAs or on other programs/cuts that benefit more people?
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Yeah but it doesn't eliminate tax revenue altogether, it eliminates taxation on growth. You have already paid taxes on the initial investment, while an RRSP defers the taxation on the initial investment as well.
10k in taxes collected today is worth 100,000 in 30 years. You don't get to count the lost taxes on growth while at the same time discounting the growth potential of the money already paid in taxes on the initial investment.