Saturday, February 10, 2007

Musings on Income Splitting

Yesterday's Toronto Star has an article on income-splitting. The good news is that apparently income-splitting is still on the table. The Star is apparently trying to make a particular case against income-splitting, as it describes the following 2 scenarios:

The Canadian Taxpayers Federation calculates that a single-income family with a $100,000 earner would save $4,320 this year under a split-income scheme that would allow each spouse to declare $50,000.

By way of comparison, a family with one $75,000 earner and a $25,000 earner would save $1,000 if they split their declared income.

The part that seems to be missing to me, is not how much each family would save by income-splitting, but how much each is currently paying. It seems obvious to me that the family with a $100,000 earner is currently (and for how many years has this been going on now?) paying $3,320 more in taxes every year than the family with separate incomes. Where in the report does it identify this built-in injustice, instead of trying to make a case against a tax law that penalizes one-income families?


Blogger Sara said...

Exactly right! Nice point.

I'm thinking a blog strike for income splitting on Tuesday, are you in?

Saturday, February 10, 2007 2:48:00 p.m.  
Blogger Cyrano said...

It sounds good, what would be required of me?

Saturday, February 10, 2007 2:58:00 p.m.  

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