Wednesday, March 05, 2008

Eliminate the RRSP contribution limit

Kokkarinen makes the case. I'm not a big fan of those who think we are on the wrong side of the Laffer curve in general. Lower taxes will usually mean lower revenues. But sooner or later, everyone wants to consume their income, so the additional deficits we might have now if we changed from a system with capped RRSPs to a system without them will have no real effect on the government's financial position. Eventually, the money shielded from taxes plus its returns will be taxed. And since the money will probably get a better interest rate than the government pays on bonds, the fisc will be better off, as will everyone else.

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