OTTAWA, February 20, 2014 (LifeSiteNews.com) – Two leading pro-life and pro-family voices in the federal Conservative caucus have joined cabinet ministers such as Jason Kenney and Tony Clement in calling on the government to keep its promise to allow income splitting for families once the budget is balanced.
“As Conservatives, we made a promise to introduce income splitting, and I expect that we should keep this pledge,” Maurice Vellacott (Saskatoon-Wanuskewin) said in a press release Tuesday.
“Families are doing their part when they pool income to cover their needs in the family budget. The government needs to do their part, where they recognize this and tax families accordingly, instead of taxing families as individuals,” he said.
Brad Trost (Saskatoon-Humboldt) said he “fully anticipate[s]” income splitting to be implemented in the next budget. “I can't see anyone who campaigned on this platform last time being opposed to it,” he told the Star Phoenix yesterday.
The annual loss of tax revenue due to income splitting is expected to be about $2.5 billion.
The promise of income splitting was a major plank in the 2011 Conservative Party platform. But last week, Minister of Finance Jim Flaherty seemed to waver on the promise, telling reporters that income splitting may not “benefit our society,” adding that it “needs a long, hard analytical look.”
Reacting to what appeared to be Flaherty’s backtracking on a campaign promise, Employment Minister Jason Kenney responded: “All I know is we keep our platform commitments. We made a platform commitment to introduce income-splitting when we get to a balanced budget. We'll get to a balanced budget next year, that's very clear,” he told Postmedia last week.
A day after Flaherty’s remarks, Prime Minister Steven Harper came out saying that Canadians will have to wait and see what kind of tax break families can expect once the budget is balanced next year. He mentioned nothing about income splitting.
Treasury Board President Tony Clement (Parry Sound–Muskoka) agreed with Kenney that promises should be kept: “I know what our campaign commitments are and I stand by those commitments,” he told reporters in Ottawa last Wednesday.
Economic think tanks are themselves split on whether the tax break would help families or not, with the C.D. Howe Institute claiming the move would do “more harm than good” and favor certain families over others, while economists like Jack Mintz say the existing tax system is unjust since it penalizes single-earner families.
Vellacott said however that the government could design incoming splitting to make it “most meaningful to the middle class and those on lower incomes.”
“Governments could place an upper limit on this transfer,” he said. “In France, single parents can split their income with children, so that all family forms can benefit.”
Andrea Mrozek, executive director of the Institute of Marriage and Family Canada, told LifeSiteNews that, properly implemented, income splitting could be made to help families in many different financial situations and circumstances, including single parent families.
The 2011 “Family Tax Cut” promise would allow couples with children under 18 to share up to $50,000 of their household income for federal tax purposes. Income splitting would save families money on their tax bill by allowing a high-earning spouse to drop to a lower tax bracket.
Under the current tax system, two families with the same household income can end up paying different tax amounts. For example, a family with parents earning $60,000 and $20,000 could pay almost $1,300 more in tax than where each spouse earns $40,000.
A family with one parent earning $70,000 and the other staying at home will pay almost $2,000 more than a family where each spouse earns $35,000.
Vellacott said that at the end of the day, income splitting makes sense for families.
“Families don't live, work or budget as individuals. Therefore, they should not be taxed as individuals.”
The Institute of Marriage and Family Canada as well as REAL Women of Canada say income-splitting is “long overdue.”