Budget 08
Not a terrifically interesting budget.
Nice to see the CPC promising to pay 10 billion against the National debt. However, program spending still increases - though the bogus Program Spending to GDP measure shows it declining. (This because the GDP is growing faster than the increase in Program Spending.)
The big news in the Budget is the Tax Free Savings Account proposal. This will not kick in until 2009 but it is a good and, in principle, cheap idea. However, it will be fascinating to see what wheezes clever accountants come up with to shovel low priced assets pregnant with capital gains into these accounts. We’ll have to wait for the regulations. The arm’s length rules are supposed to keep the sillier transactions at bay but tax accountants are frustrated artists and the prospect of putting an asset notionally valued at $5000.00 but actually worth 50,000.00 into the Tax Free Savings Account will be mighty appealing.
And even more appealing as, on the face of it, the TFSAs are evergreen, you can just keep rolling assets through.
I have no problem at all with this because I don’t believe capital gains should be taxed at all; in fact I suspect that the economic effects of the Tax Free Savings Accounts will be positive for the Canadian economy as a whole. And, yes, it might even provide a small benefit for the average tax payer.
Written by jay on February 27th, 2008 with
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