As Andrew, Marc, Toby and I pointed-out at the time, despite the low up-front cost of Tax-Free Savings Accounts, they will become exponentially more expensive over time. To obnoxiously quote myself, “this measure could burn a significant hole in future government revenues.”
It is worth noting that Jack Mintz, a huge fan of Tax-Free Savings Accounts, suggests essentially the same thing in the latest issue of Canadian Business Magazine:
Flaherty was able to bring in a substantial tax reform at little fiscal cost to the government for the next few years. The real cost will be down the road, when many seniors will have untaxed investment income sheltered in the TFSA. Of course, someone else will be in power by then, and Flaherty’s new account will make life a lot tougher for tax-and-spend governments in the future.
The difference between Mintz and us is his apparent believe that depriving the public sector of revenue is good.
- Regina Hosed by P3 Waste Water (May 20th, 2013)
- Austerity through infrastructure Cuts: Budget 2013 (March 22nd, 2013)
- Budget 2013: Time for a real action plan, not another ad campaign (March 19th, 2013)
- The Alternative Federal Budget 2013 – Doing Better, Together (March 13th, 2013)
- GDP: Austerity Bites (June 1st, 2012)