|
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
|
