Note the date on this one (2005) . An interesting rant on my part about how the Tax System seems to be slanted towards dual income families.
I read that one on the Alan Baggett news site. I scratched my head but it was actually how the tax system works. If I divorced my wife and pay her Alimony (not child support, remember that case a while back, where that is taxed in the payers hands). I can effectively split my income.
I remember having this argument that in the Government’s eyes the following scenario would be ideal:
- Divorce my wife, and pay her half my salary as Alimony (thus sharing my income)
- Have my children live with the correct Parent. This might enable them to claim the Child Tax Credit and Ontario Tax Credit
- Rent my wife an apartment in the basement of my house (with its own separate entrance).
- Have my wife take care of the kids (as daycare). Write off the money I pay her on my income as well . She does it in her apartment, so she write that off.
Yes, this is a ridiculous scenario (and I’m sure some might even claim illegal, although I’d love to see that taken to court), but this is how obtuse the entire Canadian Tax System is! I checked this with Quicktax and it was quite happy to show me the obscene amount of tax I’d save.
Alan’s tax bible is an interesting read, as are his stories (they are a little “he said, she said” which at times I am not fond of), but still interesting to read how some people are persecuted by the Tax system, while others get off “scott free”.
I do not condone the above tax shenanigans.