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From: henry@utzoo.UUCP (Henry Spencer)
Newsgroups: can.general,net.taxes
Subject: Re: Cdn RRSP for income averaging
Message-ID: <3588@utzoo.UUCP>
Date: Sat, 3-Mar-84 20:52:12 EST
Article-I.D.: utzoo.3588
Posted: Sat Mar  3 20:52:12 1984
Date-Received: Sat, 3-Mar-84 20:52:12 EST
References: <3415@utcsrgv.UUCP>
Organization: U of Toronto Zoology
Lines: 31

Peter Rowley asks:

  A friend of mine told me that he borrowed money from the bank to buy a $2500
  RRSP and then immediately sell it, transferring the income from the '83 tax
  year to the '84 tax year.  This cost about $90.  Why should the banks be
  allowed to make money this way, when it should be trivial to do this sort
  of ad hoc income averaging on the tax form?

Yes, it would be fairer in one sense if you could do this sort of thing
on your tax form.  But taxes are not *meant* to be fair.  The objective
of taxation is to extract maximum revenue while minimizing the protests
from the peons and the special-interest groups.  Fairness is not at all
relevant, except insofar as the *appearance* of fairness can deflect
some of the outrage from the victims.  You are confusing taxation with
normal business transactions, which are (more or less, roughly speaking)
entered into voluntarily and intended to benefit both parties.  Taxation
is a legalized version of armed robbery, and should be understood as such.
You can't do this sort of averaging because it would result in you paying
less tax; no other reason is necessary.  The roundabout route through the
RRSP is probably accidental and will probably be blocked sooner or later.

As to why the banks should be allowed to make money on this:  they are
doing you a service, are they not?  Surely you don't expect them to do it
for free.  If bank management started acting like philanthropists instead
of profit-oriented money-grubbers, the bank stockholders would fire them
and install people who know what their job is.  (To wit, making money for
the stockholders -- that's the way business works, folks.  No profits,
no stockholders.  No stockholders, no capital.  No capital, *no bank*.)
-- 
				Henry Spencer @ U of Toronto Zoology
				{allegra,ihnp4,linus,decvax}!utzoo!henry