Is the Proposed Income Splitting Tax Change Really Good News?
Usually as tax payers we only expect to see any potential tax changes for the better when it comes around election time for our Government leaders. It comes as a surprise that Prime Minister Stephen Harper appears to be planning to go ahead with a significant tax change which relates to income splitting.
Some may recall that this tax change proposal was part of the 2011 political platform but never really materialized.
Income splitting is something that many tax payers have been wanting for quite some time because it has the potential to make a relatively big difference to the tax obligations of many.
While this proposal that Mr. Harper is bringing forth now is a scaled down version of what was originally presented in 2011, it appears that it is going to be welcomed. The maximum amount of tax savings that can be realized will be $2,000. per couple.
Basically what it allows for is the higher income earner will be allowed to transfer up to $50,000. of their income to their lower income spouse.
This scaled down version of the split income regulation is intended to reduce the cost of the product which was indicated to be around $2.7 billion.
It is projected that this will now free up a great deal of money for the Conservatives to use for other programs, which as of yet have not been disclosed. For example, it could be that the Government would decide to expand the universal child care benefit, with the surplus funds that they will have to work with.
All of these proposed changes are part of the Conservatives plan for the family agenda.
Many are wondering why this positive type of action is taking place now when we are not all that close to an election. It could be part of the political strategy of the Conservatives getting their foundation for their next political platform in place for the next election.