Abstract
Journal of Actuarial Practice
Volume 2, Number 2, 1994
Discussion of Robert L. Brown's "Tax Assistance to Qualified
Retirement Savings Plans: Deferral or Waiver"
Mark W. Campbell
Abstract
In the paper entitled ``Tax Assistance to Qualified Retirement Savings Plans: Deferral
or Waiver,'' Robert L. Brown concludes that ``the nontaxation of investment income on
qualified funds until taken is a tax waiver or tax subsidy from the government to
participants of qualified plans''. I believe, however, that this conclusion is based on flawed
assumptions pertaining to:
- The behavioral responses of taxpayers to the withdrawal of such tax assistance;
- The definition of an appropriate benchmark tax system against which to measure the
cost of such tax assistance; and
- The appropriate basis of comparison of alternative government tax revenue streams.
Using alternative and reasonable assumptions, I conclude instead that the nontaxation of
investment income on qualified plans until taken provides gains to government and
taxpayers alike.
Key words and phrases:
Key words and phrases: behavioral response, benchmark tax system
Mark W. Campbell
Towers Perrin,
3700 150-6 Avenue S.W.,
Calgary Alberta T2P 3Y7,
CANADA
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