There needs to be more debate on the issue of income splitting this election. Conservatives have flirted with the idea in years past, and Stephen Harper promised last week he would allow income splitting in homes where one person stays home to care for a family member with a disability. Jack Layton was quick to blast the announcement, giving us an idea of his official stance on the issue.
Meanwhile, the Greens are outright supporting the taxing method, as stated in Part 4 of their vision, aptly titled: People: “It will allow one spouse to work from home in growing a garden, in developing artistic talents, in writing for perilously low income.”
Even though income splitting is allowed in many industrialized countries, including the United States (since 1948), France, Germany and Switzerland, Canada remains opposed. The big split would allow couples to pool their income and bring the breadwinner into a lower tax bracket, potentially saving them thousands of dollars per year. It’s criticized for being of little to no benefit to lower-income earners, while potentially costing the government up to $5 billion a year.
Some think throwing his support behind income-splitting would give Stephane Dion more pull with the middle-class, family-oriented voters, however apart from musing over his position last year, he hasn’t turned pro yet.
In this in-depth CBC feature from 2006 (which also explains in what capacity Canadians are able to employ the income split), then-independent (now Liberal) MP Garth Turner is cited for his support, saying it is “a tacit acknowledgment that the family, and not the individual, is the basic unit of the economy.” The argument is further explained in the feature: Why should a family where both partners earn $40,000 pay $3,500 less tax than a family where one earner makes $80,000 and the other stays home?