Saturday, November 01, 2014

Coyne On Income Splitting

He writes:

The Tory plan...removes an unfair preference: between two-income and one-income families.

This is a point that seems to elude the critics. Income-splitting isn’t some sort of special tax break for one-income families. It merely puts them on the same footing as two-income families. Under the present system, a family with one spouse earning, say, $80,000 pays thousands of dollars more in tax — $4,170 more, according to economist Jack Mintz — than a family with two spouses earning $40,000 each. This is manifestly unfair, even allowing for any value imputed to the “unpaid housework” performed by the stay-at-home spouse (a conceptual and computational morass, probably best avoided).

Actually, no it isn't.  If both members of the family earning $40,000 apiece wanted to make more money...well, they probably couldn't.  That is, they're porbably making as much as they can.  On the other hand, a family where one spouse makes  $80,000 and the other $0 has mostly likely voluntarily chosen to forgo the income of one spouse so as to persue a boutique life-style most of us can't afford. And I'm not willing to pay $182 out of my pocket for that.  Forget the principles yada yada that Coyne's refs in his piece.  We all now who this measure is for, right?  We all  know where the money's going: wealthy Reform-style Conservatives who need to have an ideological bone thrown them in advance of the 2015 election.  Andrew's just throwing a layer of philosophical abractions over the whole pile so people don't notice the smell.  Typical for him.

1 comment:

rockfish said...

Excellent dissertation. Hopefully the party passes this along and uses it in the press war on this doubling-down on another ticky-tacky boutique tax relief...