Thursday, March 31, 2011

PM Harper tells Canadians they’ll get the tax goodie when we can afford it

The opposition leaders and their media cheering sections are having fun with Prime Minister Stephen Harper’s campaign announcement regarding partial income splitting for families with children under 18. The biggest complaint seems to be that this $2.5-billion tax break wouldn’t take effect until the deficit is eliminated—up to four, maybe more, years away.

“We understand that family budgets are stretched and by making the tax system fairer for families, we will make it easier for parents to cover the day-to-day cost of raising their kids.”

– Stephen Harper

The PM’s proposal would allow parents to share up to $50,000 of their personal incomes for tax purposes. The idea is to treat eligible taxpayers as family units for tax purposes.

The Conservatives’ proposal has received a lukewarm reception in the media, at least, for the most part. But is that fair?

It seems to me that eligibility for many of the tax benefits Canadians receive are based on some form of household income. When I do my tax return each year, I do it jointly with my wife’s return because of this. And, of course, income splitting was recently allowed for some portion of seniors’ incomes. So the concept seems sound, at least, in the sense it’s already at play in our overly complicated tax system—we use family/household income to calculate tax credits so why not use it to calculate taxable income? It is also consistent with my sense of fairness—our current system penalizes couples where one spouse works and the other stays home to care for the children.

Most Canadians, I believe, would accept income splitting. The sticking point seems to be the timing. As a nation, we’re so conditioned to being bribed with our own money every time politicians ask for our votes, it comes as an unwelcome shock when a politician tells us the cookie jar is empty and we have to wait for our next hand-out.

This has presented a real dilemma for the Tories, who are basing their campaign on a strategy of being prudent fiscal managers. Slaying the deficit is job one, apparently, and so it should be. It should also be noted, however, that once we slay the deficit, there is still that enormous national debt to contend with, and one might think it would the next priority for prudent fiscal managers. But I digress.

I suppose we must face the reality that elections are all about who can give away the most taxpayer money the fastest. Giveaway promises are like honey to media types and make immediate headlines—only scandals get more attention. The next best thing to keeping up with the Ignatieffs and the Laytons is for the PM to push his promises off to a more affordable time.

Michael Ignatieff and Jack Layton are riding an anti-corporation gravy train, and seem to be hoping Canadians will accept their job- and investment-killing strategy to pick up their share of the election goodies.

I believe we should stay the course and eliminate the deficit before we reward ourselves with more social spending.


© 2011 Russell G. Campbell
All rights reserved.


  1. Personally I think it was a brilliant move. The media will make fun, so what? They ridicule all things Conservative. Those that bother to vote will see it for what it is, an intelligent approach to financial planning.
    It will resonate outside of the media circle jerk.
    Can I trademark that term?

  2. I am watching the coverage from the United States. It seems to me that Harper is lacklustre in his campaigning. The speeches have little emotion and seem to be by rote. We are not offering anything for the electorate to grab onto. Yet Ignatieff Libs are pulling away votes from the NDP with their announcments and the fear of a Tory majority. Harper needs to do something to improve his numbers. The party looks like it has stalled.