Thompson Rivers University

The Canadian tax-free savings account: a programme to help the rich get richer?

November 11, 2015

Dr. Hossain and Dr. Lamb examine participation in the Canadian tax-free savings account (TFSA), implemented in 2009, and its potential impact on wealth inequality in Canada. They use data from the 2012 Survey of Financial Security to test the hypothesis that high-income earners and wealth holders are the most likely recipients of the benefits associated with the TFSA. Empirical results highlight the significance of net worth as a key determinant of both participation in and contribution levels of the TFSA. The results are expected to be relevant to public policy-makers concerned with reducing inequality and those endeavouring to encourage savings for all socio-economic groups. There research was published recently in the peer reviewed journal Applied Economics Letters.

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