Income-splitting for families with dependent children under 18 is a huge policy initiative for Stephen Harper’s majority-hungry Conservative party, wrote the Financial Post March 28, in a story outlining the details of the plan.
So huge, you wonder why it wasn’t the centrepiece of last week’s dead-on-arrival federal budget.
But the Family Tax Cut plan announced by Mr. Harper Monday in Saanich, B.C. wouldn’t come into effect until the federal budget is balanced, which could be years from now. Like pension splitting before it, splitting earned or other income for tax purposes would benefit only some families and be no help at all to singles, including single parents. To get the full benefit, even qualifying families would have to have a large income disparity between the higher and lower wage earners. Even then, a maximum of $50,000 of household income would be splittable for tax purposes .
. . .
In a blog Monday the Canadian Centre for Policy Alternatives (CCPA) cited Osgoode Hall Law School tax law expert Lisa Philipps to the effect [that] the biggest winners from income-splitting are higher-income male breadwinners: “A man can reduce his taxes by shifting them to the primary caregiver in the family, but he has no legal obligation to give her the actual income.”
The CCPA warns this “tax giveaway for affluent couples” will put a big dent in federal finances.
Posted by Elizabeth Monier-Williams, research communications officer, with files courtesy of YFile– York University’s daily e-bulletin