Families with income more than $233,000 a year stand to gain most under the Conservative government’s controversial income-splitting tax break, a new study of the costly program has found.
“The richest families are most likely to make at least $1,000 from the new policy,” says the study released Tuesday by the Canadian Centre for Policy Alternatives.
While two-thirds of the richest families will get at least $1,000 by splitting spousal income, with the lower-income spouse being assigned up to $50,000 of the other spouse’s higher income for income tax purposes, that chance that a middle class family will receive a benefit of even $1 is “as good as a coin toss,” says a 40-page report on the analysis.
“For low-income families with children, the probability of making even $1 is very low with only one in 10 getting that much,” the report says. “The probability of receiving at least $1,000 is vanishingly small.”
The study prepared by senior economist David Macdonald and Kate McInturff, a senior researcher with the policy think tank, provided the NDP and Liberal parties with fresh data Tuesday as the Commons was set to debate a New Democrat motion calling on the government to immediately prepare and table a new fiscal and economic update as Parliament awaits a federal budget that the government has delayed at least until sometime in April, possibly longer, because of the havoc plunging oil prices have wreaked on federal government revenues.
The Conservative income-splitting plan, which it calls a “family tax break” in ads and web promotions that have been running almost since it unveiled the plan last Oct. 30, is central to the fiscal upheaval the government faces, with a price tag of $2.4-billion for 2014 alone and further costs of about $2-billion each year for the next five years.
“In fact, 89 per cent of all families (including families with children under 18 and couples or singles without children) gain no benefit from income splitting. Only three per cent of all families in Canada will get the maximum benefit of income splitting worth $2,000,” the report said.
The study found that the bottom 40 per cent of families, in terms of annual income, have “essentially no probability of getting anything” through income splitting and a chart in the report shows families with incomes under $68,000 annually have either no chance of any benefit from income splitting or a chance of barely over one per cent.
The chance of any benefit at all increases to just under 10 per cent at $53,000 to $67,000 in family income, and only 25 per cent at $67,000 to $86,000 in family income.
“Only 48 per cent of families with children will receive $1 or more from income splitting,” the report said. “Of that half of families with children that do gain, 20 per cent will receive roughly a dollar a day from income splitting.”
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Families earning more than $233,000 will gain most from Conservatives' income splitting plan, says new report | hilltimes.com
“The richest families are most likely to make at least $1,000 from the new policy,” says the study released Tuesday by the Canadian Centre for Policy Alternatives.
While two-thirds of the richest families will get at least $1,000 by splitting spousal income, with the lower-income spouse being assigned up to $50,000 of the other spouse’s higher income for income tax purposes, that chance that a middle class family will receive a benefit of even $1 is “as good as a coin toss,” says a 40-page report on the analysis.
“For low-income families with children, the probability of making even $1 is very low with only one in 10 getting that much,” the report says. “The probability of receiving at least $1,000 is vanishingly small.”
The study prepared by senior economist David Macdonald and Kate McInturff, a senior researcher with the policy think tank, provided the NDP and Liberal parties with fresh data Tuesday as the Commons was set to debate a New Democrat motion calling on the government to immediately prepare and table a new fiscal and economic update as Parliament awaits a federal budget that the government has delayed at least until sometime in April, possibly longer, because of the havoc plunging oil prices have wreaked on federal government revenues.
The Conservative income-splitting plan, which it calls a “family tax break” in ads and web promotions that have been running almost since it unveiled the plan last Oct. 30, is central to the fiscal upheaval the government faces, with a price tag of $2.4-billion for 2014 alone and further costs of about $2-billion each year for the next five years.
“In fact, 89 per cent of all families (including families with children under 18 and couples or singles without children) gain no benefit from income splitting. Only three per cent of all families in Canada will get the maximum benefit of income splitting worth $2,000,” the report said.
The study found that the bottom 40 per cent of families, in terms of annual income, have “essentially no probability of getting anything” through income splitting and a chart in the report shows families with incomes under $68,000 annually have either no chance of any benefit from income splitting or a chance of barely over one per cent.
The chance of any benefit at all increases to just under 10 per cent at $53,000 to $67,000 in family income, and only 25 per cent at $67,000 to $86,000 in family income.
“Only 48 per cent of families with children will receive $1 or more from income splitting,” the report said. “Of that half of families with children that do gain, 20 per cent will receive roughly a dollar a day from income splitting.”
more
Families earning more than $233,000 will gain most from Conservatives' income splitting plan, says new report | hilltimes.com