Recently, the Globe and Mail has been writing editorials on merits of the Tax Free Savings Account. I find it remarkable how so many so called enlightened folks can rationalize bad from good. Your Canadian government put the plan in place in 2009 for your benefit largely with an understanding that now a larger proportion of the populous is without a “Defined Benefit Pension Plan”. As you are likely aware, it is folks in the public sector who are largely the sole remaining participants of this “guaranteed” form of pension which has the effect of burdening taxpayers with legacy like costs. The Globe now has insinuated that your government treasury can’t afford the tax loss of having you receive “tax free” investment income inside the TFSA. Allow me to espouse the one gargantuan fact regarding contributions to TFSA’s. The contributions are made by taxpayers who have already been taxed once on the funds headed toward the plan. Any hard working person has been taxed on income derived from their labor in our country and little do most folks know that this form of taxation was only supposed to be temporary to pay for our efforts in the First World War. I would have no issue at all at taxing investment income (passive income) if it wasn’t taxed first through employment earnings or dividend income derived from active business.
The highest marginal personal tax rate in Alberta is 39 per cent and Alberta is amongst the lower taxed provinces in Canada. While Albertans despise the notion of a “sales tax”, a sales tax in my estimation is less insidious than a tax based on someone’s contribution to their country and service to mankind. The Canadian Income Tax Act approximates 3,000 pages of fine print and certainly detracts from our citizens’ ambition to innovate, produce, contribute, and ultimately actualize a benefit worthy of service.