Subject: Re: Income Splitting for Seniors: Who actually benefits?
How many will actually benefit from Flaherty's discriminatory pension income splitting scheme?
1. Of the 30% of seniors who receive a pension I would say may as many as one quarter are widows/widowers, single, divorced, separated. That brings down the number of eligible seniors to 22.5%.
2. Of the 22.5% who are eligible as many as 25% may have spouses who have significant income of their own and who may be in a tax bracket not too different from the spouse receiving the eligible pension income. In their case there will be little or no tax reduction resulting from pension income splitting. We are down to 16.7% of seniors receiving a pension.
3. Many of the remaining seniors receiving a pension but who had low paying jobs are in the lowest tax brackets and pension income splitting with a spouse/partner receiving OAS will not mean very much if anything.
4. All factors taken into consideration pension income splitting may not be of any useful benefit to more than maybe 12-14% of seniors.
5. Of those the ones who will benefit the most are seniors with fat pensions and stay at home spouses/partners. A retired federal judge or a retired deputy minister with a pension of over $100,000. with a stay at home spouse with no significant income will benefit handsomely. They will even be able to reduce or eliminate the clawback of OAS.
Question: What will be the real cost of this discriminatory scheme be for the government. ANSWER: Most likely a fraction of the big numbers Flaherty will announce in his budget.
Meanwhile. Look at how that “bought-off” supposed seniors advocacy seniors group, CARP, spun this:
Pension Income Splitting is the Cinderella Tax Story for Seniors
Collingwood Enterprise-Bulletin (ON) Fri 12 Jan 2007
Senior citizens concerned about losing income trusts as a low-tax investment vehicle can rest a little easier with the federal government proposal to allow income splitting. There is no shortage of eligible seniors: according to Statistics Canada there are more than 3.2 million people over 60 who are living common-law or legally married. Blah Blah Blah goes CARP...having been completely spun by the spin
BIO: Mr. Fortin started his career at the Department of Foreign Affairs and then joined the Department of Finance where he became a senior international finance official. He served as Economic Counselor at the Canadian Mission to the European Union in Brussels, and as senior economist at the Asian Development Bank in Manila, the Philippines. Mr. Fortin was Executive Secretary of the IMF/World Bank Committee of Governors on Development, and later a member of the Executive Board of the Inter- American Development Bank in Washington D.C. He has also served as Permanent
Representative of the European Bank for Reconstruction and Development in Poland, where he was involved in privatization programs and the financing of the emerging
Saturday, April 18, 2009
Posted by Fillibluster at 6:11 PM