Exempt from taxation???
If you hire a maid to do your housework, she would have to pay income tax on her earnings. If you then marry the maid and she continues to do the same housework and you continue to give her money, all that money is exempt from income tax.The two situations are essentially identical except in the tax treatment. Family tax splitting will excerbate this problem.
Charles Anthony, I don't know if you understand how pernicious taxes can be.
I read this thread with considerable interest and wonder how some of the comments can be serious. Surely August1991 jests when he suggests that spouses who do housework, and don't pay income tax on the money (?) , are somehow getting a tax break.
That is exactly the argument many of us have been trying to make for years. If a spouse stays home to raise the children and care for the home, that work has value and the working spouse should be able to pay a salary to the stay at home spouse and deduct those payments from his/her income. The working spouse would then be happy to pay income tax thereby splitting the income and the tax.
By the way, I am not yet a senior but I am retired and to listen to the rants of many about how seniors should have planned better for retirement prompts me to ask them if they have any idea how the RRSP program worked for most of the seniors out there today. Don't tell them they should have put more into a spousal RRSP when for much of their working lives, RRSPs were only of much use to people not contributing to a pension plan. The contribution limits were so low that even for much of my working life my maximum spousal RRSP contribution was less than $500.00/year. Because my job required me to move often a career for my spouse was not practicle and in many cases, not possible as opportunities in small towns are limited.
In over 44 years of work I never received a single days UI/EI benifit, never received a cent of the GST rebate or any of the other so called government benefits except for the family allowance on which taxes were paid.
Would it be such a disaster if seniors were allowed to split pension income for tax purposes? Notice, we are not talking about total income (investments, RRIF, real estate, etc) - just pensions.
