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It's Fair to Share - reducing taxes in Canada by sharing income

A Feminist Perspective approving Income Splitting
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Some have expressed concern that household based taxation would be a step backwards for women, forcing them to be dependant. Others have countered that it is the present situation which devalues women, by treating their unpaid roles as second-class and denying the value of their work.



The following is a paper which will be presented at the 2007 conference by lawyer and legal academic Rebecca Bromwich, addressing these concerns. Footnotes have been removed to faciliate reading of the document but the entire paper is available upon request.

Income Splitting

An Alternative Feminist Perspective

Rebecca Bromwich



Income splitting for tax purposes provides financial benefits to families in which only one spouse works outside the home, or in families where on spouses income is significantly greater than that of the other. The issue of whether income splitting should be permitted, long on the political back burner and tirelessly propounded by devoted advocates such as my mother, Beverley Smith, became a hot button political topic on October 31, 2006 when the current Conservative government announced the institution pension splitting together with its much reviled termination of the income trust. In effect, allowing income splitting would permit a higher income spouse to claim up to half of his or her income as the income of the lower income spouse.



Such splitting, if permitted, would materially affect many married and common law couples, including same sex cohabitants and marital spouses, who pay tax in our country. While many couples and families would derive benefits from income splitting, not everyone would: those couples where neither partner earned above $36,000 and those couples where both partners have individual earnings within the same tax bracket would not be materially affected. Depending upon how income splitting is understood, it might or might not benefit single taxpayers or spouses whose incomes are relatively similar to one another. It is possible to conceive of an income splitting regime where these groups too could benefit, as is the case in France, which is discussed briefly below. In any case, the ramifications are large and they are direct. Although critics allege that it is the rich who will benefit, and there is little doubt that certain wealthy individuals would benefit from income splitting, it is also the middle class who would be significantly affected if we were to allow income splitting. There are very few without pecuniary interest in this matter; I will disclose mine at the outset. It would affect me.



Queens law professor Kathleen Lahey has carefully analyzed the tax policy issues and potential ramifications respecting income splitting from a legal and feminist perspective in a paper for the Law Commission of Canada . Her work is meticulous and justifiably well-regarded and it is intimidating to disagree with her, especially given that I was a student while she was a professor at Queens. Her paper supports the current tax policy of disallowing income splitting and the notion that couples should be sdisaggregateds so to spromote autonomy and gender equality within relationships and to give non-earning individuals more independence from those who support them financially.s Her concerns about income-splitting include the notion that income-splitting will discourage the lower income spouse, usually a woman, from obtaining more lucrative paid work outside the home. In media reports, this opposition to income splitting is touted as sthes feminist perspective on the issue.


Bromwich goes on to outline an alternative feminist perspective. Her paper will be available at the conference. She can be contacted at rebecca@jbbarrister.com

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