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September 10, 2015 | The Quandry

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

OH NO modified

So during his gumflap with the Big P tonight on CBC, Tom Mulcair will officially announce he’s trashing the TFSA increase. Goodbye to ten grand a year tucked away for tax-free growth for your family’s future, and in with the old $5,500. This is what you’d expect a socialist to say, of course. One-for-all and all-for-one means the private accumulation of wealth is not cool, and we should all live out our days on some kind of enhanced CPP.

And what of Justin Trudeau? He would also end the TFSA boost brought in last year. Just because. In fact, he’d go one better, reducing the maximum annual contribution to just five grand. The current Liberal campaign is based on taxing the wealthy more so the middle class pays less, which sounds fair but is statistically impossible. Trudeau is also stumping around the country suggesting TFSAs are “for millionaires” and simply do not benefit the little people – who have more votes that the affluent.

Well, it’s true that 93% of all TFSAs are not maxed. It’s also true 48% of people are living paycheque-to-paycheque and that 80% of Canadians over 50 are desperately behind in the amount of savings required to survive in retirement. But by the same token, this tax-free account is one of the most widely-held investment vehicles in the land, with immense potential to improve people’s lives as years roll by.

These days almost 12,000,000 people have TFSAs. Of those who earn relatively little (under $25,000 a year), 17% had maxed their plans before the new limit was introduced. As you might expect, of people making more ($150,000 to $250,000), 32% had plans containing the maximum. CRA statistics show the bulk of TFSA holders are in low or middle-income brackets, and a disproportionate number are held by the wrinkly, over-65 set. Over a million people making less than $60,000 have been making maximum contributions. Ditto for over 1.5 million older than 55 – exactly those who need to boost assets and prepare for life post-career.

Meanwhile, the savings rate in Canada has wilted badly. On average we now consume 97% of what we earn, putting aside precious little for the future. Once de rigeur, RRSPs has also taken a hit with annual contributions tumbling drastically over the last decade. All of this has been concurrent with the rise of the house and the rapid accumulation of epic levels of household debt.

It looks like our political leaders want this to continue.

The Cons have already announced a big jump in the amount people can suck out of their RRSPs to buy a new house, along with a witch hunt for foreign buyers and a wild promise to make the Home Renovation Tax Credit permanent. The Dippers are caving in to CREA’s demands to subsidize amateur landlords by eliminating capital gains tax on rental units, and the Libs have taken the cake by announcing that RRSPs would become open for real estate purchases with every “life event”. Like marriage, the end of marriage, separation, a new job or adopting a puppy. Both Mulcair and Trudeau would also join Harper aboard the anti-Chinese bandwagon, blaming non-residents for the high prices that dumbass federal politicians themselves have helped create.

In other words, if you’re looking for fresh thinking in this campaign, real assistance for people to find balance and financial security in their lives, to lessen our collective risk, encourage personal responsibility and escape from the treadmill of debt, good luck. The best these guys can do is find new ways of encouraging house porn, borrowing and over-consumption.

But if living for today’s the only goal of this election, best vote Rhinoceros.

Leader Sébastien Corriveau has made this promise: “The moment when you vote Rhino, you will automatically have an orgasm.”

Who’s in?

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September 10th, 2015

Posted In: The Greater Fool

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