Reply #9: In Britain, tax-free plan mainly boosts the wealthy [View All]

[CHIMO]

LONDON–They've been there, they've done that. And British tax experts say that as good as it might sound on paper, savings schemes like the one launched by Ottawa this week offer very little for the people they are intended to help.

Here in the United Kingdom a program similar to the Save Your Money plan unveiled in Tuesday's federal budget has been in place since the early years of prime minister Tony Blair, who stepped down last year after a decade in office.

"The problem with these schemes is that they simply throw money away on a political gimmick," said Richard Murphy, a prominent British policy analyst with Tax Research LLP. "The spirit of the program is to encourage a savings culture by offering tax incentives for those lower-income earners who are not in the habit of putting a little bit aside.

"But almost invariably, the only people who participate are the ones with lots of spare cash – the sort of people who already do save and who would have saved anyway. So it ends up being a giveaway to the wealthy middle class."

http://www.thestar.com/World/Columnist/article/307742