Put Your Money In An RRSP

As you can tell, it's election time in Canada so I'm just posting (and uselessly commenting) on election promises. NDP (I shiver in cold hard fear each time I type that word) head taco Jack Layton "has been urging the Conservative government to double CPP and QPP payouts from 25 per cent to 50 per cent of pre-retirement income, increasing the monthly benefit to a maximum of $1,817 from $908."



The plan would be phased in over seven years. Employers would initially pay nine cents more per worker per hour, an amount that would increase by an additional nine cents per year.



A worker who makes the workers earning the average industrial wage of $47,000 per year and currently contributed approximately $185 per month to CPP would see that contribution rise to $292 per month over seven years.


But Mr. Layton said it is a savings plan, not a tax. “It’s like putting money in your RRSP,” he said.

If employers have to dish out 9 cents has is this not a tax?
 
One thing I learned this past year while offering jobs is that payroll taxes are a major drag. It ate into my margins enough for me to shift and offer self-employment contracts to save on taxes. Why should I have to pay .15% on top of the hourly wage? Fronting that cash when you're starting out has a major impact on your bottom line. No wonder people work for cash.
 
The other part to note is about RRSPs. RRSP's were invented in the 1960s precisely because the government knew it couldn't meet its pension obligations. Why not just have workers give more to an RRSP? An RRSP can be effective and offers options for guaranteed investments. A misconception is RRSP isn't "guaranteed."

Jesus, nothing is in life but this is misleading proving RRSP's are still, sigh, misunderstood. Government promising a guaranteed or supplemental income stream these days is just plain unrealistic and unreasonable. Take YOUR money, for example, and if you're risk tolerance is low, invest it in bonds, GICs, and other fixed income securities.
 
Use it as a complement to your federal and provincial pensions.
 
In fact, I argue it's a found more financial route to take. You can control where you put your money in terms of investment. The government shouldn't make CPP mandatory and let people opt out and place their money in an RRSP. Heck, it may even free some money up for an RESP for education for their children!
 
Seems to me this is a very early 20th century idea by the NDP in the modern era. I honestly believe these folks have no clue what small-medium business goes through.

Enough already with the coddling and seize control of your (financial) life.