Election: Income Splitting

So every election I complain and lobby for Income Splitting or Family Income or Household income, to allow single income families to be able to compete in this economy. This is from 2005, back when my style was a little more, um, brusque.

Remember when I first started this blog, I ranted about Single Income families and how they get screwed by the existing tax system. Well, the Conservatives seem to think the same way, now whether this is simply rhetoric or not, I cannot say (I am skeptical, just on the basis of how much this might cost the government in lost taxes).

Have a read, or look at the original post here Canadian Financial Stuff: Canadian Government Hates Single Income Families (Final Analysis)

So what have we learned?

  1. In our specific scenario (read all of my disclaimers in my previous posts) a Single Income Family as compared to a Dual Income Family, pays:
    Approximately MORE in taxes (that is Provincial and Federal taxes combined).
  2. This means that the Single income family to NET the same would have to make over $12,000.00 GROSS more to bring home the same amount (that is just unfair). Remember the single income earner at that level is taxed at the HIGHEST level on that extra income.
  3. The Dual Income family is MORE likely to be eligible for:
    1. Family allowance cheques
    2. Provincial tax credits
    3. Pay less for the Ontario OHIP TAX
  4. The Dual income family gets to write off a great deal on Daycare including:
    1. Daycare costs
    2. Summer Day Camps costs

If this doesn’t convince you that the Taxman HATES Single Income families, I don’t know what would.

If you agree or disagree comment on this, I am willing to dialogue with folks on this, but if you agree that this is UNFAIR, contact your member of Parliament. Remember an election is just around the corner, and they MOST LIKELY will return your calls (as opposed to afterwards when they kind of forget you exist (IMHO)).

What can we do to fix this?

  1. Introduce a FAMILY or HOUSEHOLD income concept, where spouses or live-in folk can split the income (or even level the taxes) of the house and NOT get taxed at such a high level.
    • Might promote more folks to stay at home with kids (thus not as much daycare)?
  2. Overhaul the whole tax system, so that everyone pays the same thing. Here I should be careful, because they’ll just end up making dual income folks pay as much as Single income folks!
  3. National Daycare moneys should go directly to the families, (ALL OF THEM) and let THEM figure out what to do with the money (ok, now I sound like Ralph Klein).

The previous points are MY Opinion only, but maybe it’s time to get more than just crazy crackpots like ME thinking about this?

If you want to compare this and have Quicktax, it’s dead easy, just create an extra return in it, and compare what you might pay if you were a Single Income earner!

{ 1 comment }

Canadian Government Hates Single Income Families

I wrote this a long time ago, but I still agree that the single income family cannot compete financially with dual income families. The title is a little inflammatory but isn’t wrong, the Canadian Government Hates Single Income families (at least their policies do).

This is my assertion, and over the next few days and posts I will put forward data that will show that through the Canadian tax system, the government is saying, “The traditional family is dead” (or maybe the “traditional family” is defined differently?)

Now before I put forward my case let me also make the following statement:

  • When I am saying single income families, this is not some nutty tirade about women in the workplace, that is why I am saying single income family (where 1 spouse stays at home with the kids, and one goes to work).
  • This is not a tirade against any tax breaks or government funding that a single PARENT family might receive (I have way too much respect for the single PARENT families out there and the amount of work they have to do).
  • This IS a tirade that I have been making for years, about how, because my wife stays at home to take care of the kids (her choice), I get penalized by the tax system.

Stay tuned over the next few days I will post my data (which is not anything earth shattering, in fact it is just me fooling around with Quicktax) and you can see how much more we single income families are penalized.

What Can You Do ?

If you feel that you agree with this, maybe you could pass it on to your member of parliament too? I have been sending this basic tirade every year, and chew the ear off any candidate that appears at my door about this as well (they don’t come by much any more, I must be on some “Crazed Loon with Big Dog” list).

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