Pat Coghlan

A flat income tax would be most welcomed by Canada's ultra-rich. No, I don't agree with a flat tax because, over time, it would ensure that wealth and power becomes concentrated in the hands of just a few. This is what the fathers of the American constitution wanted to avoid with things like hefty estate taxes (which the ultra rich almost managed to get rid of in 2006). The problem is that we have too many tax brackets. There should be just two. One for all (family) income - after some basic deductions - that is needed to live on, and a second one for all income above this threshold. Tax income we use for food/shelter/clothing at the lower rate, and income we use for luxuries (e.g. that 60" plasma TV) at a higher rate. Well, you can thank Mulroney for effectively taking kids out of the tax system. Mulroney decided that "rich" families with incomes above $80K or so don't need to receive tax-delivered benefits like CTB. That was an asinine policy change. The result is that it treats the heads of many middle-class families - who might be supporting a spouse and several children - like singles with no dependents. I know. I was supporting a wife and 5 kids and receiving $20/month in CTB support payments. The net result was that I was being taxed like a single person with the same income. And they wonder why there is a revolt going on over the single income penalty. There are many things that can be done to address the tax penalty paid by families with children where one spouse earns most or all of the income. We need to fix this problem. That said, the government has just introduced pension-splitting for pensioners. Perhaps this will just be extened to families, as per the original impetus for this thread.

Humble opinion indeed. I'd imagine federal employees could be working on different projects/contracts at different times and may be required to relocate, so depending on the work coming in one could need English, French or both. It would be quite useful for federal employees to be bilingual because then the government could assign more projects to a federal employee over the course of one's career with the feds, so even if a federal employee goes months without using their second language, the need could come up at any time (and the gov't could assign more pressing projects to their most efficient employees, language not being an issue if all are blingual). Plus there's no way of anticipating how many minutes per day will be spent answering phone calls in one's second language, so it would be tricky to figure how many minutes/hours per day would be spent working in one's second language in order to draw a line for when an employer should not make a job position exclusively bilingual. I'll tell you what happens when a manager doesn't have to certify that a second language will be used at least, say 60 minutes per day, on average. There are few limits on the number of positions that a manager can classify as bilingual. In Ottawa, a francophone manager will often try to classify as many positions as possible as bilingual, and often require that the candidate be bilingual in order to START the job, so as to avoid losing the person for 1-2 years on language training. I've seen it happen. If the position serves the public, or interfaces with a peer working in a region with a different majority language, it can be justified. Otherwise, a whole lot of money (and grief) can be saved by requiring that employees speak the language of the majority in a given region. That means English everywhere in Ontario. Ditto for Quebec. Problem (and money) solved :-) Isn't this what is done everywhere in the private sector???

link Whatever source you want to use, only a subset of taxpayers benefit. Why is that better than a general tax reduction where 100% of taxpayers benefit? Let's say that there is going to be a $3B tax cut. That might put about $300 in each taxpayer's pocket (approx). That same tax cut could wipe out the $8,000 in additional taxes a family with a stay-at-home spouse over and above what their neighbour pays, in spite of the fact that their combined incomes are the same. Is it better to give everyone $300, and allow some families to pay up to $16,000 more in taxes than their equivalent-income neighours? If we don't fix this now with the surpluses we are running, when will this ever be addressed? Well, you'll be happy to know that this is sorta how the current system works because of the way we currently target benefits towards only lower-income families. If you compare a single person making $100,000 with the head of a family of 4-5 kids who also makes $100,000 (stay-at-home spouse in this case), you will find that the tax liability of the single person and the head of the household are almost the same, within a couple of thousand dollars. Now, if you compare either of the above with a family that has 4-5 kids and two $50,000 incomes, you will find that this family's tax liability is about $8,000 less (perhaps a bit lower, given recent tax changes). What you want to see is the single person paying the same taxes as either of the above...but what about the fact that each supports 4-5 kids? They've had their benefits all clawed back because of their $100,000 income, but should their tax liability be the same as yours or lower? IMHO, it is the latter, for obvious reasons.

Pat, I agree with you 100% on this. The government should either use family income as the measure for both benefits and tax, or individual income. It is not a credible to use them inconsistantly. They should do this as a minimum. Liberals and NDP constant argue for treating everyone as individuals. Okay, then treat my wife as an individual and stop tying her to my income for taxes AND benefits. Let her apply for 50% of benefits based entirely on her income. We would benefit less from such a scheme, but at least we'd be much more on par with all other families with similar incomes.

The main reason is that, if the government is going to force couples to combine their income when applying for benefits (i.e. eligibility always based on the aggregate total), then all families with the same aggregate income should have the same tax liability. Eligibility for benefits and ability to pay taxes are two sides of the same coin. It is the family that earns/spends the income, not the income earner. Alternatively, each spouse should be able to apply on his/her own for 50% of all available benefits. If my wife has zero income, then she should receive 50% of the benefits available to a family headed by non-married person. While I might not receive my 50% share of benefits because of my income, she might receive her full 50% share because she has no income. When you use our family income to determine benefit eligibility for our family, we might end up with nothing. If we are to receive nothing because our income is too high, then it makes sense that out tax liability should be the same as other families - who also receive no benefits because of their income level - when the total income is the same. Today, there can be a difference of up to $16,000 - except for pensioners, as of 2007. You will find that the government has no problem with the concept of family income, but the problem is that it only wants to use this amount in calculations for benefit eligibility (because it's a bigger number which can be used to claw back benefits). Either use the total for both taxes and benefits, else let each spouse pay taxes AND receive a share of benefits based solely on his/her income. Don't just use family income when it suits the government.

IMHO, any manager that wants to classify a job as biligual must have to certify that the person in the job will use the minority language at least 60 minutes per day. If a person can function in a job for more than 7 hours in just one language, there is no way that the manager should be allowed to classify it as biligual. Interestingly, no where in any of the fed/prov/municipal guidelines are there any standards regarding the amount of time spent speaking the second language.

Most of the information you need can be found in this Senate report: http://www.parl.gc.ca/information/library/...s/prb0636-e.pdf Note that in almost 50% of families, one spouse earns less than 40% of the family income, so potentially all of this group would benefit. The definition of a family includes spouses and dependent children. For the purpose of filing a joint tax return, it is only these relationships that are considered re: income-splitting, and the reason is that legal financial obligations extend from a spouse to his/her children and the other spouse. I guess another way you could look at it is from the perspective of family property/assets. Your spouse has a direct claim on any family property. There is no such thing as family property between siblings, grandparents etc. You're asking the question, "why can't a family include...", while I'm simply pointing out what definition is currently acceptable by CRA. IMHO, only those who meet this definition should be able to split income for tax purposes. I don't see much chance of getting this definition changed.

And is that good or bad? Is the aim to encourage a parent to stay with the kids? What is the aim? I mean it has a snowball's chance in hell of happening. If there is a surplus now, the question is why a portion of that surplus should be directed at a small subset of the taxpaying base. There are many other options other than making any change. For example it could be directed at a general rate cut, or debt reduction. 30% of families have a stay-at-home spouse looking after the kids. Probably another 30% of families have two spouses earning incomes which are quite dissimilar. When you add the two categories together, you have 60% of the population that would benefit from income splitting. Hardly a small subset.

The status quo also means no pooled income for tax purposes. If they want to stand by the principle of pooled income then they should undertake it fully not in half measures, desipite the extent of the change required. I mean status quo for anyone who doesn't currently fall under CRA's defninition of a family Sorry, I'm not following you. I don't see the relevance of "living under the same roof". I mean that, the relationship between family members (for tax/support purposes) doesn't change when they are no longer living under the same roof. I am still responsible for my kids if my wife and I split up. Ditto for paying her alimony etc. If you want to extend the current definition of a family, these are the kids of support obligations that must be entrenched in law. If you're not on the hook to support someone, you can't expect to jointly file your tax return with that person.

I have a better idea. How about we just add the two spouses income and then tax them at the same rate as individuals. That too would give all families with the same income the same tax status/liability. On this I agree. If it is the right concept it should be implemented across the board and not just targeted as a select group such as pensioners. However, as proposed now it is simply a shift of the tax burden from couples to individuals. Adding incomes and taxing one spouse would ensure the other spouse never worked outside the home. There is a surplus now and the change could be implemented simply by avoiding spending it all!

To extend the definition, they had to change just about every law on the books. If you want to fall under the same definition, and the government is willing to go through this global update again, okay. Otherwise, status quo. Well I guess it depends what you mean by financial obligation. I understood the justification for using family income as the basis, was because there was shared income and shared costs, not because there was a mutual obligation. Two people who buy a house together also share a financial obligation. They may or may not pool their income, subject to their own arrangment. Two spouses may have pre-nuptial arrangments which separate their incomes and assets, and release each other from any financial obligation toward each other. I'm not seeing a clear connection of why there needs to be a mutual financial obligation in order to be entitled to a tax break. Further, if I undertake to take on a financial obligation toward my destitute parents, does that mean, in your view, we qualify as a "family" are can now be taxed as one income unit? See my comment above. I mean a legal obligation (spouse or child). Can you please point me to the universal definition of family? Our country has recently recognized same-sex spouses as family, many countries do not. Many religions practice polygamy and all spouses are recognized as part of the family. Some cutures have a communal lifestyle where all the commune is considered a family. Yet others consider aging parents who reside with them to be part of the family. So I'd be very interested in the basis for your conclusion that there is a universal definition for family. I mean whatever legal financial support remains when members of a "family" are no longer living under the same roof.

First, it's not a tax, it's a tax cut; and second, it is simply giving a family with one income the same tax status as a family with two incomes. Actually, giving all families with the same income - regardless of the income split between the spouses (some families have two non-equivalent incomes) the same tax status/liability, in the same way that they currently have the same benefit status/eligibiliity. Those who turn thumbs down on this concept should keep in mind that this change has been put in place for pensioners, with the pension-splitting changes introduced in the recent budget. If it's the right thing to do for pensioners, it's the right thing to do for working families as well.

Why use a restrictive definition of family? Why are two siblings living together not a family? You'd have to ask Revenue Canada or Finance, but a family is much more than co-habitating persons. A financial obligation must exist, as does between a husband/wife and their children. Are you saying you're prepared to be legally obligated to support a brother or sister and be declared a family? Revenue Canada has defined the meaning of a family, BTW. This is not "restrictive". The definition is pretty much universal around the planet.

The whole issue of income-splitting is all about giving a targeted group a tax break. It has got nothing to do with "fairness". As a country we should decide whether we want the individual unit for measuring income to be the family or it shoudl be the individual. If we decide the family, then even singles should be free to decide who is included in their family. Well, the Carter Royal Commission looked at this in 1968 and concluded that it was the family that spent the money - not the individual - so the family should form the basic unit of taxation. The (Liberal) government of the day ignored the recommendations. The government already uses family income as the basis for determining benefit eligibility (produces bigger number for clawbacks) but insists on taxing the individual...although this has changed in 2007 for retired couples. We should do the same for all families. BTW, the government already has a definition for family (person, spouse, children). Two siblings living together are not a family.

Any family in which one spouse earns most or all of the family income would benefit, not just those with a stay-at-home parent. Keep in mind that while two families with the same combined incomes can have tax liabilities which differ by up to $16,000, they qualify for identical amounts of benefits, regardless of who earned it. The government uses family income when it is convenient, namely, when they can use it to deny benefits. If the government wants to insist on taxing only individuals, then they should let each spouse qualify for 50% of available benefits, based entirely on his/her own income (which could be zero).

Families with nice, split incomes don't support it because they fear their taxes will go up...until they find themselves retired with one spouse earning most or all of the pension income. Then then support it whole-heartedly. Witness the recent change re: pension splitting. In general, the Liberals and NDP are against it (NDP were even against pension splitting) because it encourages one spouse to remain in the home - usually the wife - and this takes away her "freedom" to work.

On his blog, Garth is saying that he is going to push the Liberal party to extend income-splitting to all families, not just pensioners. Like, would we ever see a left-of-center party implement a tax change that would encourage more stay-at-home moms? http://www.garth.ca/weblog/2007/04/14/stuc...iddle/#comments

How is it going to count under the proposed system. Are we talking about runoffs (one candidate must have 50% in order to win)? They do this in France, and the result is parties make deals not to run candidates in certain ridings etc., similar to what we just saw with Dion and the Green Party leader.

Lots of public servants are being forced to learn another language - if they want to keep their jobs. Something like 80% of Ottawa public servants who complete language training go right back to using just English at work. Ditto for their counterparts in Montreal (who use French at work). How is this cost and loss of productivity benefitting Canadian taxpayers???

There was a story in today's Ottawa Citizen (bus. section) re: a Japanese company willing to pay $60,000 to each employee upon the birth of a 5th child. Japan considers its low birthrate an emergency. We don't (yet). Who's right???

Tax breaks come and go. The problem with our system is that families which don't have two spouses earning equivalent incomes can have a tax liability which can be up to $16,000 higher than families with a nice 50/50 income split between the spouses.. We need to follow the US model and create tax brackets for joint income earners which result in all families in similar situations paying similar amounts of income tax - unlike today.

This would apply to single parents too? Hmmm, maybe if he/she ran a business at home, but someone on welfare probably would not.

Gee, here's something for the federal parties to ponder about. The ADQ have suggested that families with a stay-at-home spouse should receive a payment of $100 per *week* for each child cared for at home rather than in a daycare. I think most families with at a stay-at-home parent would be content just to have the same tax liability as families in which both spouses earn equivalent incomes. This (tax breaks for at-home parents) is really starting to look like an issue that isn't going to go away.

As the previous poster said, you are probably single and don't understand how the system actually works. The avalanche of so-called benefits you refer to are clawed back based on your combined family income. In my own situation, when I was in the private sector earning a much higher salary and supporting a stay-at-home spouse and 5 kids, virtually all of our benefit payments were reduced to zero (family income was high) and our tax liability was virtually identical to a single person with no dependents earning the same salary. Another family with the same number of children and identical aggregate income would also have virtually all of its benefits clawed back, but if the income was earned 50/50 by both spouses then the family's tax liability would be about $9,000 less. This is why two-income families drive two new cars, take a trip to Florida every year and are mortgage-free by age 45, while their one-income neighbours drive an old minivan, never travel, have an old minivan and are in debt up to their ears...in spite of earning the same - or even higher - aggregate income.

I don't think you understand the issue here. The one-income families aren't complaining that they don't have enough income or that they receive fewer benefits than their two-income counterparts, they are complaining that in spite of the fact that the government deems all families with the same total income to have identical eligibility for benefits, they may have to pay up to $16,000 more in taxes than the family next door (with an identical aggregate income). Even if we had zero income, we would not be receiving $15K in various credits for our 5 children. The $2,000/child tax credit just announced by the feds is a credit, which is worth the lowest income bracket percentage (15% federally), or just over $300/year.