Income splitting won't help families in need.
By Armine Yalnizyan
The Harper Conservatives have introduced their first policy measure in the 2011 federal election campaign -- income splitting for young families.
They championed income-splitting right from the start, starting with the pensions of the elderly.
In 2006, the Library of Parliament was asked to estimate how much a suite of measures that would reduce taxes through income splitting would cost. It came up with a price tag of almost $5-billion.
The Conservatives haven’t provided a cost estimate for this new election promise, but back then this initiative was estimated to cost $2.2-billion in 2007. It is undoubtedly more costly today.
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Probing the pledge: The Tories' flawed tax break for families.
By Barrie McKenna
THE PROMISE
It’s a seductive idea: Reward stay-at-home moms for unpaid child-rearing work, while eliminating tax inequities between single-income and two-income households.
That explains why Conservative Leader Stephen Harper made income splitting his first major campaign promise.
The Conservatives pledged Monday to let families with children share $50,000 of their household income once Ottawa eliminates the deficit in four years. The plan would allow a family’s main breadwinner to shift taxable income to a less-taxed spouse or dependent children. The Conservatives estimate the measure would save as many as 1.8 million Canadian families an average of $1,300 a year at a cost of $2.5-billion.
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A Better Way To Help Families
By John Kolkman
A federal Conservative election promise has reignited the debate over income splitting as a way of helping families. Income splitting is based on a false premise, namely that a family can trade in two $50,000 per year jobs for one $100,000 per year job. If this were possible many more families would likely choose to have one parent stay at home at least in the early years. A better way to help all families with children would be to invest in enhancing child tax benefits.
Most of the media attention on the Conservative income splitting promise has been focused on it not taking effect for another five years. I welcome this implementation delay. It provides Canadians with an opportunity to debate whether this is the most effective way to support Canadianfamilies with children.
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