Canadian_Retirement

“Enhancing” CPP for young workers

Published On November 8, 2013 | By Joseph (Ken) | Corporate tax, Personal tax, Retirement

Enhancing CPP

An interesting though misguided viewpoint is Enhancing CPP reduces poverty

“”Mike Klassen says, “Canadians must reject the push for higher CPP payroll taxes.” Well, pension contributions aren’t taxes – they are deferred pay that the worker receives in retirement.”

“Without an enhanced CPP a large group of low-income seniors will rely on programs that are 100 per cent funded by taxpayers, including old age security, guaranteed income supplement, Pharmacare, medicare premiums, and social services.”

Sorry, Cliff but CPP is a tax.

As per WikipediaSuch a system [as CPP] is a hybrid between a fully funded one and a “pay-as-you-go” plan. In other words, assets held in the CPP fund are by themselves insufficient to pay for all future benefits accrued to date but sufficient to prevent contributions from rising any further.

When people talk about needing to increase CPP (sorry, “enhance” CPP), they aren’t talking about making things better for the young, they are talking about affording the old as they retire in record number in the form of baby boomers.

If they “enhance” CPP, it will increase payroll TAXES and it will put a drag upon a fragile economy, as employees have less take home money and business wage costs increase.

If we are to have a discussion, let’s make it an honest discussion.

 

Like this Article? Share it!

About The Author

Joseph (Ken)
(Ken) is a Registered Public Accountant with over 25 years of public practice experience in the accounting profession. Ken specializes in accounting information systems, taxation and financial reporting.

Comments are closed.