Cut Seniors A Tax Break

There is growing concern that seniors are caught in a tax trap, and MP Garth Turner is leading a push for Ottawa to cut seniors a break and stop pension-splitting.

Complete details contained in the release below.

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Retired couples caught in a tax trap could be getting some
relief, if Garth Turner and two million other Canadians have their way.

The outspoken MP has teamed up with 16 national seniors groups to attack what he calls, "one of the great unfairness' of our system," which has resulted in single-income retired couples paying a whack more tax than those with two pension streams coming into a household.

Today the tax system does not allow two spouses to pool income for tax purposes and, as a result, senior couples with just one pension often find themselves short of money as that pension is taxed at the highest rate in the hands of just one spouse, typically the husband.

This means a couple with one income of $62,000 is forced to pay $2,500 more in tax than two seniors making exactly the same income, but with $11,000 of that earned by one and $51,000 by the other.

"There is no justification for this," Turner says. "Retired Canadians worked hard to build this country, and often had no choice about how to structure their lives. A generation ago most men worked outside the home and most women raised families, so it's completely unfair that the tax system should penalize them. It's time to change that."

As a result Turner has recruited a growing number of MPs to support s coalition of 16 seniors groups in an effort to get Finance Minister Jim Flaherty to consider improving the system for pensioners. The effort will see a National Conference take place in Ottawa on October 3rd, bringing together the pension groups, politicians and expert speakers who will make the case for pension-splitting.

Pension splitting would significantly reduce the income tax for many Canadian seniors and, says Turner, is well within Ottawa's existing budget to finance. It is already allowed for CPP/QPP benefits but not for all other types pension income. Today's taxpayers can take advantage of relatively new rules allowing income-splitting between RRSPs as a way of achieving the same goal, a strategy unavailable to most existing pensioners.

"Over 9 million Boomers are heading for retirement, many of them in financial stress," Turner says. "Giving all Canadians the ability to split income for tax purposes will ease that stress, add tax fairness, and show this government is listening."

Members of Parliament from all parties who support the move are expected to attend the coming conference, which will feature nationally recognized keynote speakers, Jack Mintz, of the University of Toronto, and Malcolm Hamilton, Worldwide Partner, William Mercer. Canadian seniors,
pensioners and taxpayers concerned with fairness are urged to ask their MPs to attend, and support, the conference.

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