Mr. Speaker, the previous questioner raised an issue about someone contributing moneys to a trust and why should they be taxed.
The member should be aware that under the Income Tax Act we have income attribution rules where, if a parent gives money to children under 21, the income from that transfer of asset must be attributed to the parent. If that were not the case, they would be splitting their total investment income with their children. It is only to ensure that people with children do not get a better tax advantage than those without children.
The member raised two issues I wanted to deal with. The last point he made was with regard to RESPs. He stated very clearly that RESPs benefit the more affluent. This is absolutely incorrect. The current grant formula says that every Canadian, regardless of income, who contributes to an RESP is eligible for 20% government grant on the first $2,000. This is not a deduction on the tax return. It happens to be outside the tax system. The member is absolutely wrong.
I know this member. He is a member of the finance committee. He is an economist by profession and I have heard him speak very well on a number of very complicated issues with regard to the economic condition in Canada. He talked about bracket creep and he laid out that if we had a situation where the income tax brackets had been indexed over the period he was talking about, the first bracket would rise from $29,590 up to, I believe, $36,000, the member said.
The member is absolutely right. He should recognize that people who make under $30,000 a year would not benefit from the bracket creep adjustment. Also, the federal government itself is subject to purchasing power erosion by inflation because we pay salaries to our employees and we pay increased prices due to inflation for our goods and services.