{"id":458,"date":"2008-03-11T01:54:36","date_gmt":"2008-03-11T05:54:36","guid":{"rendered":"\/blog\/?p=458"},"modified":"2013-10-28T20:20:45","modified_gmt":"2013-10-29T01:20:45","slug":"resp-confidence-vote","status":"publish","type":"post","link":"https:\/\/www.holypotato.net\/?p=458","title":{"rendered":"RESP Confidence Vote"},"content":{"rendered":"

Recently the opposition parties passed a bill from the Liberals making RESP (Registered Education Savings Plan)<\/a> contributions tax-deductable, as RRSP contributions are. This was a huge gift to parents of kids who are college\/university-bound, so much so that it threatened to overshadow the recent TFSA gift unveiled by the cons. In full-on “pay attention to meeeee<\/i>” pre-election kitty mode, the cons couldn’t just seem to let that stand. So now they’ve threatened to turn it into yet another confidence motion<\/a>. These kids are seriously itching for an election, and have been for some time now.<\/p>\n

Under current rules, there is no immediate tax reduction for RESP contributions, which are allowed to compound free of capital-gains levies. Instead, the government matches a small percentage of parents’ contributions up to a maximum of $7,200 over the lifetime of the plan.<\/p><\/blockquote>\n

I’m actually a little torn on this issue. On the one hand, this is a really nice tax gift to parents and something that will help further the affordability of higher education for people that… well… could probably afford it anyway. On the other hand, this is getting to be too <\/em>generous. The RESP already allows money put away for education to compound tax-free, and when withdrawn are taxed in the hands of the student (who is often in a lower tax bracket than the parent) and contributions get some matching money tossed in by the government to boot. Adding a tax deduction on top of that makes it hands-down the best place to put your money if you have a university-bound child.<\/p>\n

I feel dirty for potentially agreeing with something the dirty, crooked, heartless cons might say, but I think that this tax break for RESPs might have gone too far. Of course, I’m not all that concerned with Flaherty putting the blame for losing the surplus on it — he’s blown far more money on far less worthy causes — but rather because I fear for the future of higher education, especially if the cons get another term. This improvement to the RESP (and lost tax revenue from the deductions) would give them just the sort of flimsy cause they need to proclaim that getting a university education is more affordable now, and cut back on government support, letting tuitions rise. This would of course hurt the low-income students who don’t have RESPs the most (for the rest, it may be zero-sum), and be a serious bummer to those who get advanced degrees and have to pay for extra years of tuition beyond what their parents might have saved for…<\/p>\n

On the gripping hand, “Canada’s New Government” is being ridiculously juvenile by making yet another piece of legislation a matter of confidence. I can only hope that when the election eventually happens (we’ve had so many false starts in the last two years that I’ve stopped expecting anything) that the cons get soundly<\/i> trounced.<\/p>\n

Edit:<\/b> What I’m trying to say here is that the tax relief for the RESP is really only going to help those families that already could save for their children’s education, it’s not really going to make higher education more affordable for everyone. Since this is going to cost the government in lost tax revenue, I think that money would be better spent in direct tuition relief or in a straightforward beefing up of the matching grants for RESP contributions. <\/p>\n","protected":false},"excerpt":{"rendered":"

Recently the opposition parties passed a bill from the Liberals making RESP (Registered Education Savings Plan) contributions tax-deductable, as RRSP contributions are. This was a huge gift to parents of kids who are college\/university-bound, so much so that it threatened to overshadow the recent TFSA gift unveiled by the cons. In full-on “pay attention to […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,11,2],"tags":[],"_links":{"self":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts\/458"}],"collection":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=458"}],"version-history":[{"count":0,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts\/458\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=458"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=458"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=458"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}