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Income-Splitting Poll Finds Majority In Favour, But Support Weak

03/24/2014 01:58 EDT | Updated 03/24/2014 02:00 EDT
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Despite criticisms that the plan would disproportionately favour wealthy households, Canadians largely support the Tories’ plan to allow income-splitting, a recent poll shows.

Fifty-seven per cent of respondents in an Abacus poll released last week said they favoured an income-splitting plan, while 22 per cent opposed it and 20 per cent were undecided.

Curiously, only a small fraction of respondents — 16 per cent — said the tax break would benefit them personally.

Since few people expect a significant personal benefit from income splitting, the Conservatives would face limited backlash if they choose to move away from this idea,” said Bruce Anderson, chairman of Abacus Data, in a statement.

The poll suggests that support for income-splitting has weakened over the years. In a 2007 survey, when income-splitting hadn’t yet been made part of the Harper government’s platform, it had the backing of 77 per cent of respondents.

Income-splitting would allow some households to reduce their overall tax burden by allowing a higher earner to shift income to a lower earner's income statement, bumping the higher earner into a lower tax bracket.

Recent studies on the proposal suggest the benefits would be unevenly distributed, with two-parent, single-income households and wealthier households benefiting the most.

According to a recent study from the Canadian Centre for Policy Alternatives, 86 per cent of Canadian households would not benefit from income-splitting, and $3 of every $4 the government spends on the tax break would go to the richest one-third of earners.

Income-splitting became a source of controversy within the Harper government, after then-Finance Minister Jim Flaherty, just weeks from announcing his retirement from cabinet, openly questioned whether the policy was a good idea.

Harper called income-splitting a “good policy” despite his finance minister’s misgivings, and Flaherty’s replacement, incoming Finance Minister Joe Oliver, suggested he’s on board with the policy, which was a core Tory promise in the 2011 election, and which had Flaherty had said would be put into place when the budget is balanced. That's expected to happen next year.

"We're going to be honouring the platform, but this is very early in my mandate so I'm going to be looking at the details," Oliver said.

Among the Abacus poll’s other findings:

  • Support for income splitting is above average in Ontario (62 per cent) and Atlantic Canada (64 per cent) and below average in Quebec (48 per cent).

  • Conservatives are the strongest supporters of income splitting (65 per cent), though it has majority support among Liberals (54 per cent) and NDP voters (55 per cent).

  • Support is highest among parents of children under 15 (69 per cent).

  • Asked about other ways to spend the $2.7-billion cost of the tax break, respondents preferred spending on priority programs (35 per cent) and paying down the debt (41 per cent) to the tax break (23 pre cent).

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