[Newsbot]

<strong>Title: </strong> <a href="/link.php?id=31051" target="_blank">Ottawa vows to block education tax shelter</a> (click to view)

<strong>Category:</strong> <a href="/news/topic/1-political" target="_blank">Political</a>
<strong>Posted By: </strong> <a href="/modules.php?name=Your_Account&op=userinfo&username=hurley_108" target="_blank">hurley_108</a>
<strong>Date: </strong> 2008-03-07 11:09:52
<strong>Canadian</strong>

[hurley_108]

I hope like hell this bill passes the senate. This is an utterly fantastic piece of legislation, and a wonderful opportunity to encourage and boost saving for kids' educations. I don't think average Canadians will be very happy with Harper if he kills this somehow.

[DerbyX]

lily lily:

I assumed RESPs worked the same way (or similar) as RRSPs, except that the government contributes a portion each year too.


I opted to open investment accounts for my kids rather than RESPs. They're more flexible and hopefully it's something that will interest them enough to continue all through their lives.

I thought they did also.

CPC complaint:

$1:

“We will do everything in our power to stop this bill from progressing further as it represents a flagrant abuse by the Liberals of the use of private members business in order to spend taxpayers' money,” said Chisholm Pothier, spokesman for Finance Minister Jim Flaherty.

Thats not spending tax payers money, its simply not forcing parents to pay tax on money for their kids education.

That is a brilliant piece of legislation and it has an even greater potential to save the gov't money as more people investing in education means less people need to rely on the gov'ts help with tuition.

Way to go Liberals. Getting good legislation done from the opposition bench.

[hurley_108]

DerbyX DerbyX:

CPC complaint:

$1:

“We will do everything in our power to stop this bill from progressing further as it represents a flagrant abuse by the Liberals of the use of private members business in order to spend taxpayers' money,” said Chisholm Pothier, spokesman for Finance Minister Jim Flaherty.

Thats not spending tax payers money, its simply not forcing parents to pay tax on money for their kids education.

Nice catch. How can not taking tax money possibly be termed "spending" tax money?

This is basically what I thought the tax free savings accounts were going to be, except it's for my kid's education, not general savings. But that may very well have been what I would have used the account for in the first place.

Heh, if this goes through, I can take the $100/month child care cheque (which is on my wife's taxes which are lower), and put it in the RESP and claim it on MY taxes!

Thank you Liberals!

[Scape]

Aren't minorities fun?

[hurley_108]

Scape Scape:

Aren't minorities fun?

O ya! The champions of the status quo always bitch about the prospect of perpetual minorities when the topic of proportional representation comes up, but minorities are when some of the best laws are written.

[ridenrain]

On the surface, this sounds like a good idea. The "official" bitch is that this has the potential to cost taxpayers up to $900 million dollars that wasn't part of the equation for this years budget. Bills that have this size of dollar value really should be part of the budget. The Liberals should have made this their budget amendment instead of the crap they did suggest.


I think they should find a way to pass this, rather than look like goofs and try to squash it. They can take the money they need from the CBC.

[dino_bobba_renno]

lily lily:

I assumed RESPs worked the same way (or similar) as RRSPs, except that the government contributes a portion each year too.


I opted to open investment accounts for my kids rather than RESPs. They're more flexible and hopefully it's something that will interest them enough to continue all through their lives.

No they don't work the same as RRSP's. The only thing tax free are the gains and when your kids pull the money out then the money is again taxable but because your kids will be in such a low tax bracket when they are in school they don't pay much on them.

This sounds like a great piece of legislation but I just have to shake my head at this because in reality it is not. Why wasn't this part of the budget amendments? Oh ya I forget, the Liberals abstained and basically defeated their own amendments.

This is nothing more than another cheap political stunt. Sure I'd love to have a $5000.00 exemption every year available to me for both my kids but just about anyone can see that it is way too costly and is hardly maintainable. Besides, what’s wrong with the way RESP's are set up now. The government even matches your contributions up to 20% (I think that’s the number but correct me if I'm wrong).

This is nothing more than a cheap political set up. Why slip this by as a private members bill? Because now the Liberals can run around saying that Harper is the bad guy just like they did when he rained in the income trusts.

While the idea of having a $5000.00 per year per child tax write off sounds delightful it is a completely irresponsible move that will cost tax payers in the end.

[dino_bobba_renno]

lily lily:

How will it cost tax-payers? It's not like everyone can claim the deduction - onlky those who are contributing to an RRSP. And since it is a deferred savings plan, why not allow the taxes to be delayed as well/... like an RRSP.

Because we all ready have an RESP plan, do we really need two programs that cost money for the same purpose?

Say your like me and you have 2 kids, that’s a $5,000.00 tax shelter per year! Now I make a pretty good wage so I'd be more than happy with the break but you can see the impact just with one family. That would be ... what .. depending n your tax bracket between $800.00 to $1500.00 loss for the government per year for a family (those are just rough numbers, I'll post the actual formula later). Deferring the taxes, ya sure great idea but we all ready do that with the existing plan but you don't make back what you lost because it goes under your kids name who, at the time they are in collage are in such a low tax bracket they basically don't pay hardly any tax.

Rather than giving people who can afford to squire away a $5,000.00 / year tax deduction why don't we take that money set up programs and grants for the people who can't afford to put $5,000.00 / year away. They are the people who need it the most and it is they that will feel the most effect from this type of deal as there won’t be money left over for them.

If you want this plan then you had better accept that one of the two plans will have to go as there is no way both will be maintainable unless they raise taxes. It would simply cost too much. I myself like the fact that for every $20,000.00 (max RESP contribution) that set aside for my kids I get a free $4000.00 from the government.

Oh and another point about the existing plan, with the way it is set up it is basically tax free for middle income earners. High income earners pay a bit and low income earners actually get some money back when you factor in the 20% that the government puts in for you. It is a better plan and there is nothing wrong with it and like I’ve mentioned it is not reasonable to assume that both plans will be sustainable with out raising taxes.

If they allow $5000 per family it will be a blow to our economy. We can not afford $900 million per year when we are faced with an economic recession. It is completely irresponsible to put forward a plan like this at this time. It just goes to show that the old liberal “tax and spend” mentality is still alive and well.

[dino_bobba_renno]

lily lily:

I thought this was tweaking the plan, not replacing it.

I have 2 kids, I don't have a decent wage so I don't need the breaks... but I still like the idea of deferring the taxes. First off - it might make people consider borrowing to contribute to their kids' RESPs, like some people do with RRSPs... where the refund pays for the loan. This is cash in their pocket, which they're likely to spend on something else, while contributing to their kids' future.

This just means potentially fewer defaulted student loans in the future.

I haven't seen anything on "tweeking" the existing RESP system. It sounds more like a new registered savings plan. Like I mentioned in edited post people in lower income brackets all ready get the tax they pay back in the form of a government contribution into your RESP's and more.

[bootlegga]

Imagine that, a Conservative government who is against a tax cut. What's next, a Liberal against social programs?

Frankly, I'm not all that surprised that Conservatives are against this tax. After all, it doesn't help the rich or their big business friends.

All in all, this is a pretty good play by the opposition. If Harper finds a way to kill it, then every other party has a weapon to point at them in a future election (AKA Harper isn't willing to cut taxes for the little guy), and if it passes, then they can say, see, we stick up for the little guy.

There is also a chance of a deficit in this year, which gives them another huge weapon, as they can point to fiscal irresponsibility on the part of Harper and the Conservatives. I'm sure it would be something like "Where did the $14 billion surplus go?"

The answer: Corporations and the top 5%

My guess is Harper just learned you can push some people (Dion) around some of the time, but not all of the time.

[dino_bobba_renno]

bootlegga bootlegga:

Frankly, I'm not all that surprised that Conservatives are against this tax. After all, it doesn't help the rich or their big business friends.

The rich will be the only ones who benifit from this. How many low income earners are putting aside 5 grand a year for their kids education?

[DerbyX]

Dino.

The purpose of RRSP contributions being tax free and the RESP being supplemented by gov't money is to encourage investment by making it worthwile.

Making RESP contributions tax free makes sense. It means that they can invest 5000 and have it only actually cost them (5000 - the tax saved). In essence they save up front.

It encourages people to invest more money earlier.

[romanP]

hurley_108 hurley_108:

I hope like hell this bill passes the senate. This is an utterly fantastic piece of legislation, and a wonderful opportunity to encourage and boost saving for kids' educations. I don't think average Canadians will be very happy with Harper if he kills this somehow.

Even though it is a good peice of legislation, I don't think it'll quite have the political effect the Liberals were hoping for. Rather than make people like the Liberals a little more, I think the effect it will have on the budget might make people hate both the Conservatives and the Liberals a little bit more.

[dino_bobba_renno]

DerbyX DerbyX:

Dino.

The purpose of RRSP contributions being tax free and the RESP being supplemented by gov't money is to encourage investment by making it worthwile.

Making RESP contributions tax free makes sense. It means that they can invest 5000 and have it only actually cost them (5000 - the tax saved). In essence they save up front.

It encourages people to invest more money earlier.

Yes I realize that but I still don't see how they will support both programs. If they make it like an RRSP it will only be a matter of time before they take away the 20% government contribution. If you could have both then great but there isn't a ghosts chance in hell of that happening, it is simply not a sustainable plan and to do it when we are faced with a recession is completely irresponsible. If they take away the 20% contribution people in lower income brackets will actually be the losers.

The way it is set up now it does encourage people to invest so why would you have to change it?