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  • Income Splitting plus other Family measures

    I'll get this one started, the Conservatives have announced income splitting for spouses with children, also significant increases to the child tax benefit.

    I have mixed feelings these type of policies, I'd rather just see an income tax cut. But, from a political perspective, quite clever I think, as:

    1- by making the splitting a credit, that removes concerns of the provinces (they won't be impacted)
    2- by limiting it to a 2k benefit, its clearly aimed at the middle class. For example, a family where one person earns 30k and the other 60k, will now be taxed the same as a family were both earners make 45k.
    3- a 420 (EDITED) cheque per child just before the next election
    4. budget will still be in surplus at next election
    5. they mostly meet an election promise they were voted in on.

    Anyway, what do you think?
    Last edited by moahunter; 30-10-2014, 02:15 PM.

  • #2
    Well the Federal election is next year and the PC seem to be doing all the right things to get elected. If income splitting helps families I'm all for it. If we are in a surplus $450 per child seems reasonable. It's the taxpayers money. Most taxes that were derived from middle of the road earners. If they cut taxes across the board how much will that actually look like on a monthly pay cheque, $20 maybe.
    Gone............................and very quickly forgotten may I add.

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    • #3
      ^my bad, $420 dollars, aimed squarely at the demographic that the Conservatives need the votes of though, middle class Canadians with children:

      http://www.cbc.ca/news/politics/step...oost-1.2818591

      The new credits go into effect on Jan. 1, 2015, but the government will wait until July to make the first payments and make them retroactive.

      That means every Canadian family with children under 18 is set to receive $420 per child just three months ahead of the next scheduled federal election — plus regular monthly cheques as the campaign nears.

      "Our goal has always been to make sure that Canada is the best country in the world in which to raise a family," Harper told the assembled crowd in Vaughan, Ont.
      Last edited by moahunter; 30-10-2014, 02:17 PM.

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      • #4
        With the bumped up child care benefit, one almost doesn't need to put any money in to save for a child's education. A child born on Jan 1, 2015 would have over $25K in their RESP at age 18 if the parents just put the child care benefit cheque in there every month. That's without any growth. Say 35K with some growth.

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        • #5
          I should imagine working couples with 1 or 2 kids may find it hard to save anything if they have day care costs to pay. Once the kids can stay home on their own before and after school that will be when money for savings is freed up.
          Gone............................and very quickly forgotten may I add.

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          • #6
            Originally posted by nobleea View Post
            With the bumped up child care benefit, one almost doesn't need to put any money in to save for a child's education. A child born on Jan 1, 2015 would have over $25K in their RESP at age 18 if the parents just put the child care benefit cheque in there every month. That's without any growth. Say 35K with some growth.
            That's what I have done with my kids, as soon as we got the Govt cheque at birth we saved the government portion of the child tax benefit in an RESP (so we never "missed" the revenue). They both have substantial plans for their university (around 30k). It would be even better now.

            Its very interesting before this anouncement Mulclair said he would wait to see the details before giving his view. By contrast, Trudeau has already said, even before it was announced, that he will repeal it. There could be a lot of upset parents then, especially like the example I gave, say with incomes of 30k and 60k, they will benefit very much at tax time. Trudeau is going to need that money though if he still has plans for a national child care policy or similar (although it looks like he has quietly shelved this idea - per Quebec, it seems the primary beneficiary of such are high income dual earners).
            Last edited by moahunter; 30-10-2014, 03:32 PM.

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            • #7
              Our household will benefit, and I think this plan makes sense. It would be simpler to have actual income splitting, but in order to put in limits to limit the benefit to very high earning families a credit makes some sense.

              Mulcair Objections are laughable. He claims that since only a small percentage of canadian taxpayers will benefit (~15%) it's a bad program. Nonsense. It affect the vast majority of taxpayers who are currently sacrificing income to provide non-monetary benefits for dependents. The only objections that I can imagine are that it should be extended to apply to households where care is provided for disabled adults and no outside funding is provided, and that an equivalent benefit could be created for single-income single parents.

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              • #8
                Originally posted by highlander View Post
                and that an equivalent benefit could be created for single-income single parents.
                But aren't they already benefiting in that they are being taxed at their marginal rate? Splitting is more of a "correction" in that it's unfair that different couples with the same combined income pay different tax (per my example earlier). The cap at 2k, and the enhanced child tax credit (which is significant for all parents) will help single parents.

                Mulcair is smart though, I'm that he hasn't said he will repeal this. He knows once Canadian families get their hands on that 2k credit, they aren't going to want to give it up.
                Last edited by moahunter; 30-10-2014, 04:39 PM.

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                • #9
                  Why do families get all the breaks? Everyone spends all their money, so it would stand to reason that everyone and the economy at large would benefit from lower taxes, provided important services aren't cut.

                  In my personal opinion, nobody should get these cuts and the feds should hand those billions over to cities to build LRT.
                  "Men never do evil so completely and cheerfully as when they do it from religious conviction" - Blaise Pascal

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                  • #10
                    LRT LRT All those billions just to take a few buses off the street and impede traffic even more.
                    Just enjoying another day in paradise.

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                    • #11
                      Originally posted by Drumbones View Post
                      LRT LRT All those billions just to take a few buses off the street and impede traffic even more.
                      We're playing that game? Here's my entry: It would do a lot more good for society as a whole than putting a bit extra McDonald's money in the pockets of crappy parents that had kids they apparently couldn't afford to begin with.
                      "Men never do evil so completely and cheerfully as when they do it from religious conviction" - Blaise Pascal

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                      • #12
                        I'm not in favor of this because single person gets nothing coming from tax cuts
                        Edmonton Rocks Rocks Rocks

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                        • #13
                          Cheques will be in the mail JUST before the election. Totally coincidentally I assure you...

                          Pitt the Even Younger: Yes I'm horrified. I smeared my opponents, bribed the press to be on my side, and threatened to torture the electorate if we lost. I fail to see what a more decent politician would have done.

                          Black Adder the Third - Dish and Dishonesty

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                          • #14
                            Income splitting tax cuts benefitt the rich the most.

                            Rich doesn't need tax cuts. Middle class and low income earners does need tax cuts
                            Edmonton Rocks Rocks Rocks

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                            • #15
                              Originally posted by Chmilz View Post
                              Originally posted by Drumbones View Post
                              LRT LRT All those billions just to take a few buses off the street and impede traffic even more.
                              We're playing that game? Here's my entry: It would do a lot more good for society as a whole than putting a bit extra McDonald's money in the pockets of crappy parents that had kids they apparently couldn't afford to begin with.
                              If everybody who has kids waited until they could have afforded them the population would be one quarter of what it is. Some of the poorest families bring up the greatest of kids.
                              Gone............................and very quickly forgotten may I add.

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