I wrote this in 2014 in reaction to Mr. Harper’s doubling of the TFSA limit to $10,000 per year and thinking of raising it to $11K.
I am borrowing an expression that David Lewis made about Canadian Corporations getting far too many tax breaks (his phrase was “Corporate Welfare Bums“). However, I feel it is correct, given the furor in the media about Rich Canadians getting fat off Retirement Welfare.
It all seems to be a reaction to The Harper Government™ proposing (or maybe only socializing) a doubling of the current TFSA yearly limit to $11K, and thus the fear of “Rich Fat Cat Canadians™” taking advantage of this unfair change to hide income and possibly end up getting paid the Guaranteed Income Supplement if they retire (GIS is really to help those who are retired with lower-income if you have a higher income it typically is clawed back). It is diabolical. Someone who could save $11,000 a year until they retire might appear to be a pauper and attempt to get government handouts? How dare they exploit this “tax loophole” ! #OMG.
Now let’s all calm the heck down, given I have just whipped you into a fury of moral indignation about the Rich Fat Cat Canadians™ out there. I would guess that the government (as part of announcing the doubling of the TFSA limit (possibly)) will force folks applying for GIS to report their TFSA holdings, and that will then disqualify them from getting the GIS. Still, if you believe the statement, it is happening right now, and the Harper Government™ is doing nothing about it! #OMG
Of course, it is not the case, but having a higher TFSA limit does make for some fascinating questions about where to put your retirement funds, especially if you are younger (for someone like me, I have about ten years before retirement, if they DID double the rate and I DID max out my TFSA’s I could have about $140K or so (with growth) in my TFSA). I have seen many compelling arguments on both sides, and I am not entirely sure which is better. However, I will be proposing tomorrow (teaser) an exciting hybrid solution (that is neither brilliant nor new, just me rehashing old ideas (as usual)).
So all you Rich Fat Cat Canadians™ can thank the Harper Government™ for yet another break being given to you, you oppressors of the proletariat.
Full Disclosure: I believe if I use the definition of Rich Fat Cat Canadians™, I must disclose that I am (most likely, depending on the income line used) a member of this club too, and yes, I wrote this (a little) tongue in cheek.