Conservatives on income splitting: what’s wrong with a little 1950s nostalgia?

The Conservatives are invoking the good old days of the 1950s to defend their income splitting scheme for families.

Speaking on behalf of the government in the House of Commons Tuesday, Minister of State Gary Goodyear took issue with the NDP for criticizing the proposal as a throwback to the days of Leave it to Beaver’s Ward and June Cleaver and Dan and Betty Draper in Mad Men.

To be eligible for the tax loophole under the Conservative plan, you must be a married couple with kids under 18 and one spouse must be in a higher tax bracket than the other spouse. A new study released Tuesday by the Broadbent Institute found that 90% of all households would get no benefit and a majority of targeted families – married couples with minor-age children – would get no benefit.

To be a big winner in this $3 billion tax giveaway, the top earning spouse would be in the top income tax bracket (earning at least $136,270 with up to $50,000 to transfer) and their spouse would be earning no money. The study found that fewer than 2% of families with children under 18 fit into this category.

The motion expressing opposition to the proposal, on the grounds that so few Canadians would be eligible for any benefit and that it would increase income inequality, was voted down by the Conservatives late Tuesday.

“The NDP seems to have taken on this charge about the Conservatives wanting to return to the 1950s as if it is some kind of a bad thing,” said Goodyear.

Before watching the exchange between MP Hélène Leblanc and Goodyear, let’s put the comment in context: in 1951, the female labour force participation rate of married women was 11%; pay equity laws were still novel and women earned a fraction of what men earned; and restrictions on the employment of married women in the federal public service remained in place until 1955.

(Bonus: Aboriginal peoples living on reserves didn’t have the right to vote in federal elections – that came in 1960, when the Canadian Bill of Rights became law.)

Photo: erjkprunczyk. Used under a Creative Commons BY-NC-ND 2.0 licence.