The federal government’s proposed tax changes highlight one of the tensions in our society: the importance of the family versus the importance of the individual.
Take the plan to add new rules to income sprinkling that reduce the ability to assign income from a corporation to more than one member of a family. The current rules benefit the family: by spreading the income between two or more people, less tax is paid. The proposed rules focus on the individual: the government’s position being that the person who did the work should get taxed for it.
The thing is, the new changes sound good when one partner is doing all of the work.
Why should a partner of a doctor that contributes to the practice get an income from that doctor’s corporation, reducing their tax burden?
But for farmers, where everyone in the family contributes work, the changes don’t make any sense. Will everybody on the farm have to keep logs of all of the activities they do. Would certain tasks, say preparing a meal for those in the field, count as less of a contribution than those harvesting?
We know that the federal Liberals sit firmly in counting the individual as more important than the family. One of their first acts was to scrap the Conservatives income splitting tax rules, something that focused more on families.
Maybe there’s a need to examine the tax system and decide who should be most important: the individual or family. But the haphazard way the federal government is approaching changing the tax rules will only serve to harm both.
