Trying to make the rich richer

Here's hoping Michael Ignatieff can put a scare into Stephen Harper and get some changes in the federal budget. I think I'm similar to most Canadians when I think another election will settle nothing and, while I'd like to see Harper out of power sooner rather than later, a coalition will probably anger a lot of Canadians even though they work quite well in other countries. After eight years of misery, I actually envy the States politically because they have a new, charismatic leader who seems to be putting a lot of stock in science and will restore the US's environmental reputation. Our leader only insists on helping out the rich.

Take the new Tax-Free Savings Account. Like the GST cuts, it's a perk for the rich disguised as a boon to every Canadian. I consider myself middle-class. LP and I bring home a good household income with me bringing home over two times what LP makes after taxes. We're good with our money without having to think about where we spend every penny. Our only debt is our mortgage which feels to be unlike most other Canadians in our age bracket who have car payments and credit card debt to deal with. We even have some money set aside to top up our RRSPs at tax time and then we'll use our return to pay down our mortgage. In July, we'll have our second child. We're unsure if LP will return to working but we think we can do well on my salary alone. Despite our good standing, unless someone can point out some huge advantage to the TFSA, we won't be using it.

We pay into our RRSP and are trying to max it out. 18% of our annual salaries is difficult to max out but we're close. We currently have one child so that's $2500/a to get the maximum benefit for Julie's RESP. Starting in July, we'll have to double that. Those are the two biggest savings plans for us. Number three on anyone's list should be their mortgage. If you decide to pay that off over the full 25 years, you'll pay double for your house. Granted, our interest rate is currently super-low thanks to the tanked global economy and we could probably invest our money for better returns but paying down your debt is always a good idea. Add all that together and over 60% of my net pay goes to savings plans and the mortgage. And now Stephen Harper thinks LP and I can find another $10 000/a? Good luck.

That money is taxed before it goes into the savings account so it's not like I can reduce my tax burden by putting it away. Currently, is there something secure I can invest in which will pay high interest? Sure, in time the markets will recover and steady investment in a mutual fund will reap the rewards but I'm already doing that with my RRSPs and I'm having trouble maxing those out. They also save me on my tax bill. ING will give me a 5-year GIC at 4% but that defeats the government's big selling point that I can access my money if I need it, unlike trying to withdraw from your RRSPs.

So who can benefit from Stephen Harper's little scheme? The answer is always the same: the rich. They're the ones who probably have an extra $5000 lying around to invest and would like to save a bit on the earnings. Until my house is paid off, I cannot take advantage of this offer and I'll bet 60 or 70% of Canadians won't be able to properly take advantage of it either without foregoing RRSPs or their mortgage. Then again, maybe that's Harper's little trick; maybe people will pay into a TFSA instead of their RRSPs and the government will collect more tax without people knowing their mistake. The extra money will help pay for a few more cabinet ministers who earn a big raise over regular MPs and are to be neither seen nor heard in a Harper government.

Oh, the irony

We did our monthly or so recycling run today. We like to let it build up so it barely fits in the trunk of the car. We pulled up to the recycling bins to see that someone had backed their Toyota Tundra right up to the little gate in the fence AND LEFT IT RUNNING! LP and I deposited our milk jugs and cardboard where they needed to be but not in record time. Just after we were done, the Tundra driving man finished as well. We noticed he took a few trips back and forth and wasn't speedy by any means. He had been there for a little while before we arrived by all appearances. I was left wondering why someone driving a nice looking Tundra who's taking the bother to recycle leaves his truck idling for 10 minutes in +10°C weather. Calgary is only just figuring out how to pick up recycling with regular garbage while Edmonton has been doing it for 15 years or more so it requires some effort by the citizens who do recycle so I assume anyone recycling in Calgary has some environmental awareness. I have a huge beef with the excess idling that goes on just to have a warm car instead of dressing properly and enduring the few minutes it takes to warm up the car while driving. I'm hoping more anti-idling laws will come into effect and be enforced. By the number of people who use the Fire Lane right in front of Superstore's doors as their own personal reserved parking spot without suffering any ill effects, I don't hold much hope.