Imagine your kid’s school has 100 kids. It’s a good school, and all the parents pay for a lunch program so everyone gets a sandwich. Economically, it’s in a fairly diverse neighborhood so the school charges the parents for the lunch program in proportion to their income. Sounds good right? Everyone pays relative to what they can, and everyone benefits.
One day, the principal decides 15 of the students will get an extra sandwich. Nothing else changes in terms of who pays how much, but 15 kids are now getting two sandwiches. The parents of the 15 kids chosen also make the most money. An extra sandwich won’t help them as much as it would the other kids.
Now imagine we’re talking about over $2 billion dollars, not sandwiches, and congratulations you understand everything you need to about the Conservatives income splitting plan. Well, almost everything. The most important thing to understand about the plan is it is about splitting voters, not income.
The Conservative government should be well aware of the fact approximately 85% of Canadian households will not benefit from their income splitting plan. Those households include single parent homes, ones with no children, or ones where two parents make an income in the same tax bracket. They should also know this is not the best use of over $2 billion dollars because their own Finance Minister told them so before his sad and untimely passing.
Why stake so much political capital and federal revenue on a tax cut that will benefit so few then? Simple, those few vote.
The last federal election saw a voter turnout of 61% nationally. Policies, even bad ones, that appeal to demographics who vote above the national average is smart politics. Elections Canada separates Canadians between the ages of 18-44 in to three age brackets. All three of which voted below the national average, while the two brackets for Canadians aged 45-64 voted above it. Which age group do you think is more likely to have one high income earner, and be married with kids?
When Statistics Canada’s Labour Force Survey included questions on voter turnout, one of the ways it broke down the results was by marital status. Married people voted at or above the national average. At the average if they had children under 5, and above it if they had children over 5, or none at all.
A plan to allow income to be split between two people will exclude single parents by default. The Conservatives are probably not worried about a ballot box backlash though. The same Labour Force Survey showed single parents with children under 5 had the worst voter turn out by marital status.
The Canadian Centre for Policy Alternatives showed families earning over $233,000 will gain the most under income splitting. Looking at Statistics Canada’s last National Household survey people at that income level are over 80% married, and 60% between the ages of 45-64. The same groups who vote above the national average.
Stephen Harper and the Conservatives know full well most Canadians will not benefit from income splitting. They are counting on those who will benefit, or even those who only think they will, being more likely to turn out to vote. This is divide and conquer politics, disguised as a tax cut. If younger people and single parents voted in the same legions this tax break for the wealthy might be a tuition reduction, or a national day care plan instead.
The Conservatives don’t call their plan voter splitting of course. They don’t actually call it income splitting either, using the term “family tax break” instead. The catch is when they say “family”, they probably don’t mean yours.