As the budget day nears, the Tories try to distance themselves from income splitting. While the budget estimates include income splitting for seniors, the government signals that is as far as they are ready to go this year. It's believed there's simply no room in the budget for full income splitting which, if implemented, will reduce government revenues by $5 billion.
But what about partial income splitting? What if we start by allowing a limited amount (even as little as $15,000) to be attributed to a spouse? That alone will reduce the tax burden for plenty of families by as much as $1000 a year. That will make income splitting a 'fait accompli' which no opposition party would dare to repeal. The cost will be 3-4 times lower than implementing full income splitting; loss of tax revenue could easily be offset by eliminating wasteful spending. And it will make way for the full income splitting with the transfer limit phased out in the subsequent budgets.
According to the Ipsos-Reid Poll, 77% of Canadians think income splitting is a good idea. Let's make the government aware of that. The online pre-budget consultations end at midnight (Eastern time). That's just a little over 8 hours from now. So let's make our voices heard while the opportunity is still there.
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