Archive for October 30, 2014

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Income Spitting: Huge Tax Cuts for Rich Families

“How’s your leg today, Chuck?”

“I checked it last night, it was looking better then. This morning it’s looking better still. I wasn’t very good company yesterday because I was worrying about it.”

I said, “I was listening to the news this morning, our Prime Minister is offering a tax break for people earning over fifty thousand a year. It will cost all taxpayers 2.7 billion dollars.”

Income Spitting: Huge Tax Cuts for Rich Families

The chart below shows how much couples at different household income levels are estimated to get from federal parental income splitting in 2014. Each decile contains 10% of all families, arranged by family incomes. Couples in the first decile have average family incomes of $30,600 or less. These couples will get an estimated $9 per year from these new tax cuts to help them give their children a good start in life.

The tenth decile contains the 10% of families with the very highest family incomes. Couples with children who fall into this decile will receive federal tax cuts worth an average of $1,914 per year, up to the maximum of $6,600 per year for those living on single incomes of $187,000 or more.

But, if parental income splitting is to help make sure all children get the best possible start in life, why should parents who need the most financial assistance raising their children get small federal benefits like $9 or $74 or $104 per year – while those who need it the least will get an average of $1,008 or $1,091 or $1,914 per year, and as much as $6,600 per year? Why should parents who can already do virtually anything they want to help their children off to a good start need such generous help from the federal government?

How is this tax cut fair? With children all across the country going to school hungry every day, how do such extremely unequal benefits help give all children in Canada the best possible start in life? (Canadians for Tax Fairness)

 

Chuck said, “That reminds me of a cartoon I saw a while back. It showed an alley with garbage cans, one of the seedier parts of town. There was an upturned cap on the ground and a sign above it that read ‘Wintering in Florida, please leave donations in the usual place.’ What I can’t figure out is why the government is doing this. It just doesn’t make any sense.”

I said, “The government isn’t required to make sense, only to get reelected.”

“I shouldn’t have even bothered to get out of bed today. I got another letter saying they’re going to cut my TV off because of that disputed $54 bill. I have proof that it’s been paid, they just won’t listen. If they cut me off, I’ll take all my business to another company. They can take me to court, shoot me, do whatever they want. I don’t care.”

I asked, “Do you have any plans for Halloween?”

“Yes, I’m going to be disguised as a magician. I’ll have my slippers on, I’ll turn off all the lights and I’ll disappear.”

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