Income Splitting

Andrew Coyne writing about the "fairness" of income splitting:

Is income-splitting unfair to singles? A couple earns $100,000. A single person earns $100,000. Income-splitting would benefit one but not the other. Shouldn’t they pay the same of tax? No, of course not. Horizontal equity requires that we treat like as like. But a single person and a couple aren’t in similar circumstances. The couple has $100,000 to spend between them. The single gets to spend it all on himself. He thus has more discretionary income -- the amount left over after basic living expenses -- out of which to pay his taxes. It’s only fair he pays more.

What about a single father paying child support, which would be a much more common occurance given our divorce rates? It seems to me that people in that position would cry foul. Look, I don't want to dismiss this idea out of hand, because there is some merit to it. However, it is a very expensive proposition and I haven't noticed the Canadian people crying for $5 billion in cuts to federal spending. What we need is a rational discussion about this (what about caps or making this move toward fairness revenue neutral?). What we don't need is more propaganda.

Recommend this Post