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Topic: Inevitable budget thread
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sheep
rabble-rouser
Babbler # 2119
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posted 19 February 2003 11:01 AM
Don't fret. The RRSP limit is going up to 18,000 by 2006, but the rule is still %18 of previous year's earnings OR $18,000 ($14,500 in 2003, $15,500 in 2004 and $16,500 in 2005, up to $18,000 in 2006), whichever is less. So if you're only making $17,000 a year, your RRSP contribution limit for 2002 will be a mere $3060. I find it odd people think the new limit is unfair. CPP taxes are going up each year, and there's no guarantee that people entering the workforce today will have access to a government pension. So why shouldn't people be given the opportunity to put something extra away for retirement?
From: Vancouver | Registered: Jan 2002
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sheep
rabble-rouser
Babbler # 2119
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posted 19 February 2003 11:58 AM
quote:
"The middle class" can't afford to contribute $18,000 to an RRSP every year; most can't even afford to contribute $1,800. Get real
Sez you. But a two income family grossing $120,000 a year, putting 10% into their RRSP with a matching employer contribution of %50, equals $18,000. $120,000 a year isn't middle class? That's roughly what a nurse and teacher could conceivably gross in a year. You think the "rich" are relying on their RRSP contributions to retire on? Ha!
From: Vancouver | Registered: Jan 2002
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Pogo
rabble-rouser
Babbler # 2999
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posted 19 February 2003 12:05 PM
There is a limit to government resources extending a break to even more income of the high income earners is silly.#1 - It doesn't serve a pressing national need. They don't need it to survive retirement. It's not like the choice is this break or they will be eating catfood. #2 - It doesn't make macro-economic sense. RRSP's are by their nature very conservative usually. Yes you can invest in whatever you want, but there is a natural urge to be relatively safe and not risk your retirement cushion. People often will put a high percentage into guaranteed income vehicles, bonds and GIC's. If you make $100K and you have investment resources that are unavailable for a RRSP you are going to be looking for investments that provide you with the best tax treatment. These will be not be bonds and GIC's but equity instruments, which is what we need more. #3 - It's not fair. There are plenty of alternative tax reductions that would be valued more by the people that received them. That is the theory of the graduated scale, that everyone should be suffer the same loss from their taxes. High income earners already save a greater portion of their income, they don't need a further reward for doing so.
From: Richmond BC | Registered: Aug 2002
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clockwork
rabble-rouser
Babbler # 690
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posted 19 February 2003 07:24 PM
Teachers around here (Toronto) are some of the highest paid on the continent, apparently. I think they top out at around $65K, if I remember what my friend (as a teacher) said. Nurses make about $25/hr, I think. Again, another friend whose wife is a nurse told me how much she made. Even without overtime, that provides a base of $57K.I think sheep and I, living in the TO region, have a different view of incomes than people in other places in Canada. As for proving that families earning more than $120K making up more than 10% of the population, I can't. (See table 2). Average income for the highest quintile is $110K in 1995, which probably translates to about the $120K range now. But given it's average and not median, I suspect it's less than 10%.
From: Pokaroo! | Registered: May 2001
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sheep
rabble-rouser
Babbler # 2119
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posted 20 February 2003 11:43 AM
Actually, with the line of work I'm in, I'm privvy to a lot of salary information. Not just in the Toronto area but across Canada and the United States, for many different jobs. Things are not as bleak as some would have you believe, and not as great as others would have you believe. quote:
Hell folks who make $50,000 a year would have trouble putting away three grand.
If a single person making $50k can't put away three grand a year for their retirement, then they have some money management issues that is not the responsibility of the federal government. But some people are making $50k and raising three kids on their own at the same time, and yes, that person would have difficulty saving $3000. Different people have different circumstances and it irks me the way people think they can judge someone based soley on the size of their paycheque. I find it kind of petty and mean spirited that people here are begruding a tax break to wage earners that helps them save for retirement. It's not like this is a tax break that allows them to buy a 52 inch tv. It's a break on money being put away to ensure people who have worked their entire lives have something to live on in their old age.
From: Vancouver | Registered: Jan 2002
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radiorahim
rabble-rouser
Babbler # 2777
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posted 20 February 2003 11:50 PM
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But some people are making $50k and raising three kids on their own at the same time, and yes, that person would have difficulty saving $3000
Exactly my point. Heard one of the "talking heads" on TVO the other night who said that the average person who does have an RRSP is able to put in around $2500 a year. I don't have a problem with giving a tax break at this low level. I do have a problem giving folks who earn enough to afford to sock away $18,000 a year into their RRSP's a tax break...they don't need it. Yes it will be taxed eventually, but at a much lower level. What we do need, is a public pension system that is adequate enough so that seniors are not living in poverty. Many European countries have been able to do this, there's no good reason why we can't do it.
From: a Micro$oft-free computer | Registered: Jun 2002
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DrConway
rabble-rouser
Babbler # 490
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posted 21 February 2003 07:56 PM
In the 1970s, CPP was defined benefit. It appears to have morphed into a hybrid of defined contribution and defined benefit. quote:
A question Dr. C. They mentioned a tax cut on capital. Is that a capital gains tax cut, or a cut in the tax corporations pay?
I don't know if you have it in the USA, but in Canada most provinces (and until recently, the feds) levied a tax on the capital base of a corporation, which is basically an asset tax, as I understand it. Corporate apologists whine that this tax penalizes businesses that incur a loss because they have to pay it anyway, but I've never heard of a corporation going under because it couldn't make the corporate capital tax, which has a bottom-end exemption anyway. As well, provinces like Alberta target the capital tax to banks only, whereas in BC it's more broadly based. In any case it's something like a half percent levy on the asset base.
From: You shall not side with the great against the powerless. | Registered: May 2001
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