Income splitting: a good idea, or a tool against feminism?

[velvetpage]

A friend posted earlier today about the need to leave the city where she and her family make their home, because it is not possible to live on one income there. She pointed out that if the Conservative government comes through with their plan to allow income splitting, it might mean they could stay put.

I knew almost nothing about this, so I did a bit of research. http://www.cbc.ca/money/story/2006/11/21/incomesplitting.html

Basically, income splitting means couples would file one tax return between the two of them, rather than filing separately as individuals. For couples where both parties earn around the same amount, this wouldn't make a difference, but for couples (like me and Piet) where our incomes differ by quite a wide margin, it would substantially reduce our tax load by taking one into a higher tax bracket but the other into a much lower one.

The research I did suggests that for this to benefit a couple, the difference in their incomes has to span at least two tax brackets. So, the difference between my income and Piet's isn't quite big enough; if it were added together and split in half, we'd be paying slightly more than if we each pay separately. However, if my income went up by another couple thousand dollars, it would benefit us to the tune of several thousand dollars' savings.

The main argument against it is a feminist one: it would make it harder for women to leave when their income was that much more closely tied to their husband's, when he presumably makes more. (That's a pretty big presumption, actually.) I don't really see the benefit of this argument, actually; it seems that this tax measure reflects the way most couples actually live - that is, pooling a great deal of their income, if not all of it, and paying the bills out of the common account. If that's the way couples are handling their finances already, then changing the tax system to reflect that shouldn't have much effect on her ability to dissolve the arrangement. As a safeguard, the joint return should include the amounts that are actually being pooled, so that, if there is a need to split them later, it is known how much came from each party.

Edit: a good argument against, here: http://qnc.queensu.ca/story_loader.php?id=45648d153a937

So, everyone, putting aside the party aspect for a moment (because "I don't trust this government to do anything worthwhile" is rather counter-productive to this debate) is this a good idea? Why or why not?

Comments

[urban-homestead.livejournal.com]

This is, itself, one of the big objections to income splitting that often comes from a certain segment of the left: that it demeans single people by suggesting that the family is a more important unit of society than the individual. Naturally, as a crusty old conservative, I think that's true! But this is controversial precisely because many people feel that their rights not to form a family are threatened, that people are "punished" at tax time for being single. Or, as one woman no-longer-on-my-friends-list just described the income splitting concept, a conservative plan to economically force her into being pregnant and barefoot in the kitchen.

[velvetpage.livejournal.com]

I think we've just found another point of agreement. First, no offense to the childless/free who may read this, but families are important, and supporting them should be a priority because they're ensuring the long-term future for everyone. Second, no tax cut is ever enough to force a certain course of action on anyone. The tax break is rarely enough to replace a second income, and the option of working certainly wouldn't go away. Someone who could almost afford a certain option might be able to actually manage it, but for most families, this will make a difference of a few hundred or a few thousand dollars at most. Her taxes won't go up because she's single.

Third, while demographically it's more likely to be women on the lower end of the wage imbalance, it's certainly not true for everybody. There are at least three women on my friends list who earn more than their husbands, and several more who have the education and training to possibly make more, if their situations were different.

Lastly, if the income-splitting were to include, for example, a single parent and a child old enough to have a part-time job, this could still benefit single parents and subsidize some tuition at the same time.