The Knowledge Bureau suggests a quick fix for fairness and equity this time around.
Winnipeg, MB. January 29, 2008. The Knowledge Bureau, Canada's leading educator in the tax and financial services, has submitted its pre-budget suggestions to The Federal Finance Department recommending changes to improve fairness and equity in the tax system for Canadians.
Tax savings from new pension income splitting rules introduced for tax year 2007 are lucrative, in some cases can add up to six figures in savings to the wealth of Canadians earning qualified pension income over an average 20 year retirement period, says Evelyn Jacks, President of The Knowledge Bureau and best-selling author of Essential Tax Facts. However because eligibility for income splitting is tied into the criteria for claiming the $2,000 pension income amount, the existing rules favor those who retire with employer-sponsored plans, (they can split income at any age), over those who have self-funded private pension savings from RRSPs, (who must be age 65 to benefit from pension income splitting).
The flaw is in the age criteria for the pension income amount, says Mrs. Jacks. which results in a considerable disadvantage to the self employed and others who are not members of Registered Pension Plans. This needs fixing.
Second, The Knowledge Bureau suggests improvements to two features of the Canada Pension Plan:
Third, the cost of education has been rising in Canada, yet the amount of tuition, education and textbook credits that can be transferred to supporting parents, spouses or grandparents has remained at $5000. This threshold should be increased substantially to reflect the real costs of supporting a student financially.
Finally, charitable giving rules should recognize both time and money. If we can figure out a way to give a community-based Fitness Credit for children, says Mrs. Jacks, why not give credits to those who volunteer at the community centre or other worthwhile community endeavors by creating tax recognition for volunteer time?
Evelyn Jacks is one of Canada's most prolific international authors, speaker, educational publisher and an award-winning entrepreneur, having written 40 books, including the Essential Tax Facts series (annual editions in 2005 to 2008), Make Sure It's Deductible (3rd Edition, McGraw Hill) Evelyn is also co-author of a cutting edge team leadership title: Get Your People to Work Like They Mean It (McGraw Hill).
The Knowledge Bureau, is a national post-secondary educational institute specializing in training inter-advisory teams in the tax and financial services to practice Real Wealth Management: the after tax, after cost accumulation, growth, preservation and transition of wealth. This includes planning strategically and tactically for financial stewardship, business succession, retirement income and tax efficiency with their clients. Her latest course is entitled Tax Efficient Retirement Income Planning, one of six courses in the Retirement Income Specialist Program, leading to the MFA Designation, offered exclusively by The Knowledge Bureau.