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Originally Posted by Fuzz
Sure, but we already have a TFSA, and most people don't max them out because they need to pay for existing first. Drastically raising the limit only helps those wealthy enough to have the cash to max it out, which means not paying taxes on it. So it's a tax break for the wealthy, primarily, while reducing government income that needs to be made up elsewhere, or cut services. That's why I don't think it's good policy.
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Agree that it only benefits those that have the $ to max out already, which is going to be people with money. 4-5% of Canadians max out their TFSA annually. But to be fair, there's an argument that the tax break to the wealthy is outweighed by the investment in Canadian businesses.
Encouraging investment in Canadian companies and reducing their cost of capital is not a bad idea, but I think it's a bit clunky. There's probably easier ways to encourage investment in Canadian businesses than a 5k increase to TFSA room that has to be tracked for which portion is Canadian vs non-Canadian and the benefits only comes from the small portion of people that have their TFSA maxed. I don't think it's going to have a significant impact on Canadian businesses simply because it's only $5k from the people that have the $ sitting on the sidelines. The benefit to the economy is capped. How much $ does this realistically add?
And for individuals, one of the big benefits of TFSAs is that they're simple and this starts to undo that... I can't wait to report the balance and assets of my TFSA to the party of...small government.
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Haha I use wealthsimple now and they have it all figured out
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Me too but I couldn't resist taking a shot at clunky big bank software.
Also, this is shades of Stephen Harper proposing that they increase TFSA room to $10k annual (but he was removing inflation formula) just put through a maple leaf rinse. Going to take bigger ideas than this for PP to steal the spotlight from Carney IMO.