Someone making CA$ 90k will get the full OAS. If they have a spouse who makes $90k, they will also get the full amount. So a household with $180k income is getting a bunch of government money.
Why does a couple with $180k HHI need to get anything?
Why does a couple with $180k HHI need to get anything?
Presumably the optimal strategy if you have retirement income within the range where you face a 15% clawback might be to withdraw extra income one year so that you can avoid the clawback the following year, since the higher marginal tax rate would be less than the clawback saved.
> Just tax those with high incomes to get it back.
This appears to not raise as much money as many people think. Interesting conversation with UK tax lawyer Dan Neidle on the topic:
* https://www.youtube.com/watch?v=hgQONOM15HI
* https://en.wikipedia.org/wiki/Dan_Neidle
(Of course there could be reasons besides strictly revenue to do it, but folks should be realistic about the pros and cons.)
Dan has actually criticised a similar situation in the UK where child benefit is clawed back from higher earners.
> If I was a Tory Chancellor, I wouldn’t abolish inheritance tax. I’d fix the ridiculous marginal rates that mean there are hundreds of thousands of 30-somethings paying more than 70% tax on every additional £ they earn.
https://taxpolicy.org.uk/2023/09/24/70percent/
It’s reasonable to question the balance between how much taxation should be born by higher income pensioners (who likely own their home outright) vs working age people at the same level of income (who additionally pay social security tax). Maybe it would make more sense to roll social security into the tax system and raise pension payments so lower income pensioners don’t lose out.
It is the same with social security in the USA.
The higher earners are already heavily subsidizing the lower. Take away their returns and they will vote to dismantle the whole thing.