Put some thought into tax proposal

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For now the differing opinions expressed over income splitting are being presented as a rift in the Conservative caucus. But let’s hope we hear some honest discussion on this possible tax break in the year leading up to the next federal budget.

Expressed as part of the Conservative platform in 2011 – to be implemented when the budget is balanced – this plumb would be plucked by a choice few. That’s the assessment coming out since Finance Minister Jim Flaherty last week questioned the wisdom of going ahead with it.

He immediately heard feedback from colleagues who apparently felt the need to stand on this promise. So far, the party has been in no hurry to clarify its position, which should mean it’s under careful consideration.

The immediate thought from the public will be, yes, a break from all those taxes.

This item, however, would be an entitlement to married couples with children under 18. That would be great if in fact it meant lower-income families. But it means a person in a higher income tax bracket being able to shift some earnings, to be claimed by a spouse in a lower bracket.

Again, sounds great in theory, but ultimately it means more so helping out people who are already relatively high earners.

Critics have raised other points. As males in the majority of cases are the ones with the higher salary, this could be a factor discouraging women from returning to the workforce.

Flaherty, when he brought up the subject, questioned the wisdom of offering a break that would cost the treasury $3 billion when the government is hoping for a relatively modest surplus of about $6 billion next year. The provinces, by the way, would also have to pony up from their tax share.

By all means, a break in income tax when it can be afforded is desirable. But find a way to direct it to those with lower incomes. Considering the obscene spread already separating rich and poor, it’s hard to justify taking tax from those at the lower end.

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