Big Guy Posted February 16, 2014 Report Posted February 16, 2014 During the last campaign that eventually led to a Conservative majority, one of the major promises made by the Harper Conservatives was that they would bring in income splitting for all Canadians – as soon as the government was able to balance the budget. Since that time, they have vehemently defended that promise. Well, they have balanced the budget and the economists of both the left and right have criticized income splitting as a bad policy. This potential loss of an annual 2 to 3 $billion in taxes to benefit about 10% of Canadians (the wealthier ones) has created a real problem within the Harper government with influential ministers debating basic public policy in public. Minister Jim Flaherty, the Conservative guru of finances, has gone public with his criticism of that policy. Up to a few weeks ago, Harper had been emphatically supporting the policy. Jason Kenny (he who has already been chastised by Flaherty for Jason's criticism of the Toronto Mayor Ford fiasco) has continued to strongly support the policy as has minister Clement. Now Harper is starting backtrack and appears to have become an observer of the debate. “Official” spokes persons for the party are tap dancing, ducking and swerving in an attempt to explain the “official” position of the Conservative party. Is income splitting now dead in the Conservative political water? Is this the last we are going to see of Jim Flaherty? Is Jason Kenny continuing to position himself as the heir apparent of the party? Does it mean anything that Jim Prentice (a Harper minister of the past and a rumoured potential successor) was one of the first “private sector” economists to criticize income splitting? Is this the first signs of a major split in the party and the wheels starting to come off the Conservative machine? After all those recent “leaks” to the Toronto Star from a mole in the PMO served to embarrass the party, are Conservatives starting to take sides? Is it much ado about nothing? Quote Note - For those expecting a response from Big Guy: I generally do not read or respond to posts longer then 300 words nor to parsed comments.
TimG Posted February 16, 2014 Report Posted February 16, 2014 Is it much ado about nothing?Exactly. The Conservatives made a promise. Some are looking at it now and have decided it was a bad idea and are now looking at alternatives. Not all conservatives will agree. Why is it a bad thing for governments to change their minds and, more importantly, to start a public discussion about what policies make sense? Quote
On Guard for Thee Posted February 17, 2014 Report Posted February 17, 2014 Unfortunately for the Harper conservatives it was their promise in the first place, and their promise they broke, so now they look stupid for having broken it. Especially when it was Harper who spoke it, and Flaherty who broke it, or at least that's the image, and on the day after budget day. Yikes, the PM and the finance minister with various views. Somebody must not have read the email! Quote
Keepitsimple Posted February 17, 2014 Report Posted February 17, 2014 Unfortunately for the Harper conservatives it was their promise in the first place, and their promise they broke, so now they look stupid for having broken it. Especially when it was Harper who spoke it, and Flaherty who broke it, or at least that's the image, and on the day after budget day. Yikes, the PM and the finance minister with various views. Somebody must not have read the email! Give it a rest. They might still do it - you won't know for another year and a half. What I am sure off is that the Conservatives will continue to give some sort of tax preference to families with children. What form that ultimately takes is open for discussion. But if you want an example of outright lies, look no further than Ontario's former Pinocchio Premier, Dalton McGuinty. Quote Back to Basics
TimG Posted February 17, 2014 Report Posted February 17, 2014 What I am sure off is that the Conservatives will continue to give some sort of tax preference to families with children.Most importantly: a tax preference that does not discriminate against families with one parent staying at home. Quote
Topaz Posted February 17, 2014 Report Posted February 17, 2014 As I said before on this forum, IF this is anything like the pension splitting, where the higher pension SHARES, it doesn't split it down the middle and the lower gets half, which was a disappointment, the lower gets a % and the lower you are the less of the %, so the larger the pension like MP's gets more the lower one gets. Do you really think the government would lose more income revenue after giving up so much to businesses? Quote
On Guard for Thee Posted February 17, 2014 Report Posted February 17, 2014 Give it a rest. They might still do it - you won't know for another year and a half. What I am sure off is that the Conservatives will continue to give some sort of tax preference to families with children. What form that ultimately takes is open for discussion. But if you want an example of outright lies, look no further than Ontario's former Pinocchio Premier, Dalton McGuinty. I don't want them to do it. It's unfair, and it wouldn't help me anyway. But there was Harper in Saanich BC blabbing on, and then now there was Flaherty blabbing on. Aside from the political fallout, I suspect Flaherty is right in re-thinking his bosses idea. If we have some money in the colective bank, it should be better shared than amongst only 15% of Canadians. Quote
TimG Posted February 17, 2014 Report Posted February 17, 2014 (edited) I don't want them to do it. It's unfair, and it wouldn't help me anyway.Well it is pretty clear that you are not in the 10-20% swing vote demographic that the CPC needs to target but there are people in that demographic who do think it is fair and would benefit from it. Edited February 17, 2014 by TimG Quote
Vancouver King Posted February 17, 2014 Report Posted February 17, 2014 Why would they reconsider income splitting? It meets the gov't acid test that all such tax related changes should be made to increase the transfer of wealth to the top 5% of Canadians. As the middle class borrows more cash to pay it's bills, we can be certain that income splitting will allow the purchase of that up scale Mercedes by those already flush with wealth. Quote When the people have no tyrant, their public opinion becomes one. ...... Lord Lytton
TimG Posted February 17, 2014 Report Posted February 17, 2014 Why would they reconsider income splitting? It meets the gov't acid test that all such tax related changes should be made to increase the transfer of wealth to the top 5% of Canadians.And that appears to be why they are having second thoughts. An increase in the child tax benefit is an alternative being considered. Quote
On Guard for Thee Posted February 17, 2014 Report Posted February 17, 2014 One would assume that is why Flaherty is shying away.The optics and the numbers are bad. But they have so many bad optics at the moment. Quote
Keepitsimple Posted February 17, 2014 Report Posted February 17, 2014 (edited) I've been giving it a bit of thought with the objective of giving a helping hand to lower income families with children. I think I'd be OK with transferring up to $30,000 when one earner makes $60,000 or less. If you make $61,000 you get to transfer up to $29,000, $62,000 up to $28,000 and so on until the transferrable amount no longer applies at $90,000. This approach would be particularly helpful to a family with a stay-at-home spouse who would have little or no income. All in all, it targets low and modest incomes, does not benefit "the rich" and would cost far less than the estimated $2.5 billion in the current plan. It's an example of hoe Harper can keep a promise - and satisfy at least some critics. Edited February 17, 2014 by Keepitsimple Quote Back to Basics
The_Squid Posted February 17, 2014 Report Posted February 17, 2014 Well it is pretty clear that you are not in the 10-20% swing vote demographic that the CPC needs to target but there are people in that demographic who do think it is fair and would benefit from it. At least you get that this is a vote buying ploy... many supporters here do not get that... Quote
Big Guy Posted February 17, 2014 Author Report Posted February 17, 2014 At least you get that this is a vote buying ploy... many supporters here do not get that... Income splitting also uses the tax dollar to promote the right of center agenda. This would encourage the two parent (man and woman - since women usually make less money) family with children to allow the wife to stay at home (or switch to part time) to look after the kids. Divorced, single parent, same spouse and poor are left out. That is a message that the right of center lobby has always tried to send. Quote Note - For those expecting a response from Big Guy: I generally do not read or respond to posts longer then 300 words nor to parsed comments.
TimG Posted February 17, 2014 Report Posted February 17, 2014 At least you get that this is a vote buying ploy... many supporters here do not get that...How is it any different from a 7 dollar daycare policy or anything else put forward by any party. The fact is most policies which parties use to differentiate themselves benefit a small number of people and can be described as 'vote buying policies'. Quote
Bryan Posted February 18, 2014 Report Posted February 18, 2014 At least you get that this is a vote buying ploy... many supporters here do not get that... All election promises are vote buying ploys. People opposed to income splitting either don't understand it, or are just lying to shoot it down because their guy isn't the one proposing it. It helps anyone in any income bracket where there might be a disparity in income levels between partners. Quote
waldo Posted February 18, 2014 Report Posted February 18, 2014 People opposed to income splitting either don't understand it, or are just lying to shoot it down because their guy isn't the one proposing it. It helps anyone in any income bracket where there might be a disparity in income levels between partners. no - the following CD Howe Institute analysis that suggests the Harper Conservative income-splitting proposal will not benefit, proportionally, the middle class. re: income splitting Harper Conservative proposal hype: "At an estimated annual cost to federal revenues of $2.7 billion, the funds from income splitting could be much more effectively and equitably spent on refundable tax credits for daycare or direct funding to the provinces to improve daycare provision. That is, if the true intention is to assist families with the greatest need in raising their children." The income-splitting proposal would allow couples with one or more children to shift up to $50,000 per year from the higher-earning to the lower-earning partner for tax purposes. If the two partners were in different tax-rate brackets, some savings in their combined taxes would result. Who would not benefit from this proposal? Well, according to research by the C.D. Howe Institute’s Alexandre Laurin and myself, fully 85 per cent of all Canadian households: single persons, sole parents, low-earning couples, childless couples and even higher-income couples with children where both partners are in the same tax bracket. Who would gain? Our estimates show the benefits would accrue disproportionately to higher-income one-earner couples. More than 40 per cent of total benefits would go to the top quartile of families by income, with the largest annual tax savings of $6,500 going to one-earner couples with taxable incomes above $185,000. Thus, the income-splitting proposal would direct most benefits to couples who least need support for their children (high income with one spouse at home) and minimal if any benefits to families with the greatest need. Even worse, by raising their effective tax rate, the scheme would discourage married women from entering or remaining in the workforce, thus reinforcing traditional gender roles. Quote
carepov Posted February 18, 2014 Report Posted February 18, 2014 Family A has both parents working each making $35,000 per year. Family B has one parent working making $70,000 per year. The other is at home with no income. Why should Family B be paying thousands of dollars more in income taxes each year than Family A? Quote
bleeding heart Posted February 18, 2014 Report Posted February 18, 2014 (edited) The short answer, of course, is that progressive taxation will determine this is so...but it's not to punish "families"....as far as the point seems unfair (and it's not necessarily unfair) is because of circumstance. Put the question another way: why should people of (relative) means be financially rewarded for having one member not working? Edited February 18, 2014 by bleeding heart Quote “There is a limit to how much we can constantly say no to the political masters in Washington. All we had was Afghanistan to wave. On every other file we were offside. Eventually we came onside on Haiti, so we got another arrow in our quiver." --Bill Graham, Former Canadian Foreign Minister, 2007
bush_cheney2004 Posted February 18, 2014 Report Posted February 18, 2014 ...Put the question another way: why should people of (relative) means be financially rewarded for having one member not working? Because families of lesser means are rewarded for having no members working at all. Quote Economics trumps Virtue.
bleeding heart Posted February 18, 2014 Report Posted February 18, 2014 For a moment I thought you had a serious point to make!....that was a pleasant, momentary delusion; my bad. Quote “There is a limit to how much we can constantly say no to the political masters in Washington. All we had was Afghanistan to wave. On every other file we were offside. Eventually we came onside on Haiti, so we got another arrow in our quiver." --Bill Graham, Former Canadian Foreign Minister, 2007
waldo Posted February 18, 2014 Report Posted February 18, 2014 Family A has both parents working each making $35,000 per year. Family B has one parent working making $70,000 per year. The other is at home with no income. Why should Family B be paying thousands of dollars more in income taxes each year than Family A? prior to your post I provided analysis detail from the CD Howe Institute that suggests your scenario lacks substance/foundation/credibility within that Harper Conservative income-splitting proposal. Quote
carepov Posted February 18, 2014 Report Posted February 18, 2014 The short answer, of course, is that progressive taxation will determine this is so...but it's not to punish "families"....as far as the point seems unfair (and it's not necessarily unfair) is because of circumstance. Sorry, I don't understand this sentence. Put the question another way: why should people of (relative) means be financially rewarded for having one member not working? Maybe I'm tired today... but I don't understand your question - Family A and Family B have equal means, why should either family pay less income tax? Quote
carepov Posted February 18, 2014 Report Posted February 18, 2014 prior to your post I provided analysis detail from the CD Howe Institute that suggests your scenario lacks substance/foundation/credibility within that Harper Conservative income-splitting proposal. My opinion is that the current taxation system is unfair for middle class families that have a single income earner. What do you think? Perhaps the revenue loss from income-splitting should be made up by increasing the tax rate at higher income brackets (>~ $80,000)? This would address the concerns of the CD Howe Institute, no? Quote
bleeding heart Posted February 18, 2014 Report Posted February 18, 2014 Except for circumstances in which one person cannot work--which is not, I don't think, the matter we're discussing here--they make a choice to be a single-income family. The family of lower-income earners does not, or not as clearly, have the same choice. Are you opposed to a progressive tax system? Or do you think it should only apply to people without families...that having a family should erase the tax-paying difference? Quote “There is a limit to how much we can constantly say no to the political masters in Washington. All we had was Afghanistan to wave. On every other file we were offside. Eventually we came onside on Haiti, so we got another arrow in our quiver." --Bill Graham, Former Canadian Foreign Minister, 2007
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