Income-splitting changes to be announced

[BigNumbers]

Very happy they started this - it needs to be expanded. It is compeltely unfair to tax a single income fmaily much harsher than a dual income family.

To be completely fair they should go to family-based taxation, where the husband and wife (or partners, however you look at it) have a combined tax portfolio, so that you ar tax agnostic between income earners.

It would stop a lot of the tax planning that is just making lawyers rich and getting the government to the same place, where folks are doing all this dancing around to move income from one spouse to another.

[BigNumbers]

Originally Posted by Sylvanfan

I would benefit a lot more if things like health care expenses and daycare were considered family expenses instead of individual.

Agreed - stuff like this is what penalizes the single income family vs. the dual income family. Complete BS.

[Calgary14]

Originally Posted by foshizzle11

what if you could move one spouse into a lower bracket but still keep the other in there, ie at least 1 drops down. I think this would be beneficial overall. Is there any information about how this is done? Will this process be quite complicated or just something added into quick books for example.

We usually do our own taxes but this year, since it could be a bit more complicated we might find a professional to help us. Any suggestions from CP?

Aside from the new family income splitting measures just announced there are a few ways: spousal loans, hiring a spouse for a corp, div income to the lower earning spouse, eligible pension income splitting, TFSA, RESP, CPP income splitting, etc.

Income splitting depends on your own personal situation and what would work best for you. If you do your own accounting the actual transaction could be done in quickbooks easily but there are tons of other factors to consider that quickbooks doesn't help with

[MarchHare]

Todd Hirsch, Chief Economist at ATB Financial, just retweeted this image:

[Dan02]

The more I think about this the more ridiculous it seems.

Should single parent households be only taxed at 50% of their income?? Their invisible second person is bringing in no income.

[#-3]

Originally Posted by Dan02

The more I think about this the more ridiculous it seems.

Should single parent households be only taxed at 50% of their income?? Their invisible second person is bringing in no income.

I agree, you could also say.

Should 2 working parents who make 60 -70 grand end up paying as much tax as a single income family that makes 140 grand?

I'm not sure that they should, I think the family contributing 2 full time works to society should benefit. And there are strains on the double income family that a single income family doesn't have. Cost of commuting, Child care.......

[chemgear]

Originally Posted by MarchHare

Todd Hirsch, Chief Economist at ATB Financial, just retweeted this image:

Here are the articles that he's linking to:

http://www.pressprogress.ca/en/post/...amily-tax-plan

http://www.macleans.ca/economy/econo...politics/#edn1

Basically looks like this doesn't help any median or average income families at all (actually doesn't matter if they have kids or not). Just high income earners with a kid and a spouse (likely a wife?) that stays at home.

[FlamesAddiction]

Families-couples without kids should be the ones getting the tax breaks. We use fewer services and just based on my own observations in the places I have worked, are more productive workers.

As someone else mentioned, this more than anything helps wealthier single income families that don't need 2 incomes.

Just like the GST cut, it is another tax break that will not benefit the people that need the extra income the most.... but people see "tax break" and it ends up buying votes.

[ken0042]

Originally Posted by FlamesAddiction

Families-couples without kids should be the ones getting the tax breaks.

The thing is that kids are a "drain" on the tax base for 20 years, then contribute for another 40. So by not having kids to pay taxes when you are old, you end up being a drain yourself when you retire, as you haven't put any new taxpayers into the system.

[FlamesAddiction]

Originally Posted by ken0042

The thing is that kids are a "drain" on the tax base for 20 years, then contribute for another 40. So by not having kids to pay taxes when you are old, you end up being a drain yourself when you retire, as you haven't put any new taxpayers into the system.

Touché.

Although it isn't a guarantee that a kid grows up to be tax drain or a tax credit. Nor should it be assumed that a person without a child will not be putting in more than they get back.

[opendoor]

Originally Posted by BigNumbers

Very happy they started this - it needs to be expanded. It is compeltely unfair to tax a single income fmaily much harsher than a dual income family.

To be completely fair they should go to family-based taxation, where the husband and wife (or partners, however you look at it) have a combined tax portfolio, so that you ar tax agnostic between income earners.

It would stop a lot of the tax planning that is just making lawyers rich and getting the government to the same place, where folks are doing all this dancing around to move income from one spouse to another.

The money to replace the lost taxes from that would have to come from somewhere. Essentially there'd be two options: they could raise everyone else's taxes to subsidize families who can afford to have one person stay at home, or they'd do what the US does and tack lost revenue onto their massive deficit. Neither is a good option.

There's a reason that most of the developed world has done away income splitting. It reduces labor participation (particularly among women), hurts lower income families, and does nothing positive for the economy.

[GGG]

As someone who gets full benefit from the 2k tax rebate I am disappointed in it. This is just terrible policy. If you can afford to have a single income to raise kids you don't need the tax break at the expense of other taxpayers.

Much better policy to help children and families would have been to direct all of the benefit into the UCB. At least all families would be benefited even though it's still a broad brush.

I would have much rather seen support directed at low income earners.

[chemgear]

Originally Posted by GGG

As someone who gets full benefit from the 2k tax rebate I am disappointed in it. This is just terrible policy. If you can afford to have a single income to raise kids you don't need the tax break at the expense of other taxpayers.

Certainly small sample size but the only people I know who will benefit the most from this are the most wealthy ones. In fact, they've already called dibs on the money as part of a new DSLR or a Holt/Nordstrom shopping trip.

[V]

Well, count me as one that will use the $2k to provide a little mortgage payment. I sure wouldn't consider us wealthy, although I make enough that my wife can stay home with the kids.

[csnarpy]

So, the way that I read this - my family should benefit from this. Both myself and my wife work but I make 3x what she does. Am I wrong?

[GGG]

Which is the child tax credit. Is that the line item on the non refundable tax credit list that gave you a 2 k tax credit?

[Calgary14]

Originally Posted by GGG

Which is the child tax credit. Is that the line item on the non refundable tax credit list that gave you a 2 k tax credit?

Child tax credit - Line 367 which works out to about $350 per child maximum per year

[Mr.Coffee]

Is the government trying to encourage single income families here? Is it more of a social belief that kids are best brought up by their parents at home rather than daycare?

Could be a stupid question for sure, but if this is the intent, not sure they went far enough. Tough to see what the government was actually trying to achieve here actually.

[Righteous1]

I think i'll just stick to laundering of my illegally earned millions

[Slava]

Originally Posted by Mr.Coffee

Is the government trying to encourage single income families here? Is it more of a social belief that kids are best brought up by their parents at home rather than daycare?

Could be a stupid question for sure, but if this is the intent, not sure they went far enough. Tough to see what the government was actually trying to achieve here actually.

Well there is an election next year, so what they're trying to achieve is a fee votes by buying them with our own money. It's the same song and dance with everyone at this point in the cycle.