Monday, February 12, 2007

Blog Strike for Income-Splitting

I wish to add my voice to the Blog Strike for income-splitting. I have no special training in this area, but I thought I'd add my two cents of what this particular measure would mean to me and my family.

To me, income-splitting is a tangible way to accomplish many laudable goals. First of all, it is a measure of respect for marriage. How so? When a man and a woman declare their vows before witnesses, they are committing to a shared life, 'until death do us part'. If they take these vows seriously, then they are creating a covenant partnership, one that means that their very lives belong to each other, in a committed, mutual self-giving. The State ought to respect and encourage these promises, as they contribute to stability for society. By separating these individuals through individual taxation, the State, in effect, pays lip service to this covenant, but doesn't really honour it. By treating the couple/family as a single economic unit, the State shows a willingness to acknowledge this partnership in a privileged way, as it should be. Income-splitting would also do this in a non-discriminatory way, unlike, for example, past Liberal/NDP child care plans. Whereas only privileged individuals would have benefitted from such a plan, income-splitting, like the CPC child care plan, applies across the board, leveling the playing field for families seeking to make the best choice for their own families. Income-splitting honours the fact that families are in the best position to make these decisions, and not far-off bureaucrats with their own visions of how families should be making decisions about work.

I mentioned the child care decision of the CPC for another reason - it was one of the few times in my relatively short life that I recall the government making a decision that honoured families and their own abilities to choose the best for their situations. It could, in that case, be credibly argued that the child care benefit is best left in taxpayers pockets (I won't argue against that) - but the contrast is tremendous between the CPC decision to equally-honour all of Canada's children and the Lib/NDP one to create spaces for the privileged-few from the taxes of all. It was a heart-warming moment for me when that priority was passed. Not primarily because of the extra money we receive, but especially that our country, for once, didn't kick the family in the teeth in order to achieve some politically-correct program. I see income-splitting as another opportunity to affirm the family, and to put families even more in control of their destinies in a great Canada.

I suspect that some portion of the CPC decision for the child care benefit, and potentially income-splitting, would be for political reasons - to attract and keep voters like me in their column. I can appreciate the need to appeal to voters in many ways, and I would like to encourage all politicians, not just the CPC, to take ownership over this issue and to pass it in a bipartisan way, to demonstrate that it is the right thing to do. Done especially in this fashion, it would help to build trust and honour in political institutions that badly need shoring up. Do the right thing, guys!

As tempting as it is, I'll resist the temptation to call for not only income-splitting, but retroactive income-splitting to compensate for the years that married couples, especially those with one wage-earner, have been discriminated against, as though the State has the right to decide how to punitively tax families and thereby tempt/force more of its citizens into the workforce.

UPDATE: Can't believe I forgot this point - IS also allows the spouse staying at home to effectively be 'paid' for the work done in maintaining the home, a very effective way to put pay respect to the hard work done by those who stay home to care for children and otherwise take on the role of homemakers.

9 Comments:

Blogger Joanne (True Blue) said...

Nice job! Very eloquent.

Tuesday, February 13, 2007 7:05:00 AM  
Blogger Sara said...

Thanks Cyrano

Tuesday, February 13, 2007 8:16:00 AM  
Blogger Torian said...

I especially like the point at the end.

Those against IS say that it is social engineering- but that is exactly what taxation is doing now.

"We want you out in the workforce so we collect more taxes, so we will make it financially difficult for you to exist on one salary"

Tuesday, February 13, 2007 9:20:00 AM  
Anonymous Anonymous said...

Cyrano,

I will challenge you right now. As a centrist liberal I am for a homemaker's allowance of $300 per week to replace the $100 Harper cheques. Are you on?

Mushroom

Wednesday, February 14, 2007 5:21:00 PM  
Blogger Cyrano said...

Mushroom

Can you elaborate a bit? You're saying approximately $1200/month from the government? Does this go to all homemakers, or only those with children of a certain age? If with children, does the number of children affect things? Where does the funding come from? Frankly, I'm not even sure I agree with the $100 checks to begin with, let alone replacing them with something else. I don't think the government should be in the business of child care, but especially not a restrictive program that would only benefit those who make use of daycare. If you're offering the $300/week instead of income splitting, that's a different conversation than what you appeared to propose. As a matter of fairness, I think income-splitting is still the correct way to solve the injustice.

How about this offer instead - let's drop the $100 Harper cheques, but put through income-splitting at the same time. That, I would be game for (and I have to say that our net benefit from either program is about the same - so it's not purely financial self-interest at work here).

Wednesday, February 14, 2007 11:22:00 PM  
Anonymous Anonymous said...

Cyrano,

Homemakers who had contributed to the CPP and voluntarily chose to leave the workforce. The homemaker will have to be the primary caregiver for the child under 12. A child with disability will receive the $300 a week payment until 18. In fact, the homemaker can still receive the $300 a week payment as long as he/she works less than 20 hours a week and earning less than $240.

The number of children will affect further income splitting. The income can be split one-half for the first two children and a full income split. A couple with a family of three will pay no taxes for the first $40 000 earned!!!

Funding. This is what you neo-cons are good at. Government spending needs to be slashed drastically. The government may have to go to debt initially, but the benefits of this policy may work.

So, yes this is almost bringing a Guaranteed Annual Income. The scheme is similar to the ones in Ireland and France.

Mushroom

Thursday, February 15, 2007 12:14:00 AM  
Anonymous Anonymous said...

Make it a full income split for the third child born to a couple.

Mushroom

Thursday, February 15, 2007 12:21:00 AM  
Blogger Cyrano said...

Hey hey hey - I thought we were beginning to communicate here, what's this 'neo-con' stuff? I've never been called that before - not even sure what you mean by it. Nor do I understand how you've priced out this proposal, simply by stating "Funding. This is what you neo-cons are good at." If you're claiming that we're better financial managers because we actually consider the costs (monetary and otherwise) before we implement programs, then thank you - that's very kind of you to notice ;)

I have several problems with your proposal, and I fail to see its superiority to income-splitting. I have to admit that your proposal gets bogged down very quickly - it's too complicated. Secondly, it's cumbersome to adjust for inflation. Income-splitting automatically adjusts as wages change. Yours needs regular amendments to keep up to date. Sorry, got to go - my ride is here - will drop back later.

Thursday, February 15, 2007 7:31:00 AM  
Anonymous Anonymous said...

Cyrano,

You seem to believe that I am proposing the homemaker's allowance is an alternative to income splitting. What I am actually proposing is a more ambitious form of income splitting NOT ONLY between the two partners but FURTHER splitting to take into consideration the number of children in the household. A familial quotient is used to calculate further income splitting.

For example:

Partner 1 earns $40,000.
Partner 2 earns $20,000 due to part time work as a childminder and the homemaker's allowance. Familial income is $60,000 and that means they are taxed on $30,000 each.

They have three kids, one of which is under 12. Partner 2 receives the homemaker's allowance.

Children 1 and 2 equates half of an income split. The taxable income for the partners has been knocked down further to $15,000 each.

By having the third kid, a further income split allows the couple to reduce its taxable income to $7500 each.

I may have got the arithmetic wrong. What I am doing is with one stroke of a pen, change the social safety net and the tax code of Canada. It is income splitting of the couple that takes into consideration the number of children in the household. At the same time, I have replaced Harper's day care cheques for a homemaker's allowance. Note that this plan gives the greatest incentive on couples who have three kids and more.

The neo-con/so-con analogy is used to goad you into action. By limiting the revenue collected by the government and taking into consideration a deficit may need to be run for the financing of the homemaker's allowance, major cuts will have to be made in balancing the books by Year 4 of a government majority mandate. This is something I will let you decide on which government programs need to be dismantled to finance both income splitting AND a homemaker's allowance.

Mushroom

Thursday, February 15, 2007 2:01:00 PM  

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