Posted by NationBuilder Support · April 20, 2015 3:07 AM
1. Family Income Splitting
The federal government plans to spend about $2-billion per year on family income splitting that will mainly benefit high-income, traditional families with a stay at home spouse, to a maximum amount of $2,000 per year. There is no benefit at all from income splitting for single parents, or for two parent families in which both earners are in the same tax bracket, including the middle and bottom income tax brackets; these families with children under 18 represent over half of all families that are the apparent target of the scheme, according to the Broadbent Institute study, The Big Split. Meanwhile, the large savings will go to families with one partner in the top tax bracket and a stay at home spouse with a tax rate of zero. This big pre-election tax cut will directly increase income inequality.
The federal government has delivered on the first of its two major tax promises from the 2011 election campaign. Income-splitting has been extensively assessed and widely criticized for its revenue cost, its tilt toward higher-income families, and its failure to accomplish anything beneficial for the economy.
If the Tories go ahead with plans to double the contribution limit on tax-free savings accounts, it will cost the government billions of dollars and benefit only the very wealthy, two separate studies released Tuesday say.
Posted by NationBuilder Support · February 24, 2015 4:00 AM
OTTAWA—The existing Tax-Free Savings Account scheme is projected to cost the federal government up to $15.5 billion annually when it matures, and doubling the contribution limits would shift additional billions from tax revenues into the pockets of the already well-off, a new Broadbent Institute study has found.
OTTAWA - Two studies on tax-free savings accounts sound alarm bells about their long-term fiscal impact if the Conservative government keeps a 2011 campaign promise to allow people to park almost twice as much money in the popular savings vehicles.