Mad Men-style tax policies hurt Jewish families

Mira Oreck

Discouraging women from working outside the home is surely not an acceptable goal for tax policy in the year 2014. 

But that may just be the primary motivation behind the Harper government’s plan to introduce “income splitting” for families. The tax scheme being proposed by Prime Minister Stephen Harper and his Conservative government is built on traditional notions of family structure, and is designed to benefit families with one breadwinner and a stay-at-home spouse. 

This policy, advanced by socially conservative groups like the Institute of Marriage and the Family Canada and REAL Women of Canada, is being promoted as “helping families.” REAL Women of Canada is an avowedly conservative women’s organization that has led the charge for family income splitting for decades. They are profoundly anti-feminist, support anti-union laws, and oppose public child care, abortion and same-sex marriage. 

The majority of Canadian families – including those in the Jewish community – will see no benefit from income splitting. To gain anything from income splitting, a family with children under 18 must have two parents in different tax brackets to share income. Families with parents in the same income tax bracket and single-parent families automatically don’t qualify. 

This is bad news for Canada’s Jewish community, the majority of whom are dual income earners with both women and men working outside of the home. 

A recent study released by the Broadbent Institute found that nine out of 10 Canadian households would receive no benefit at all from income splitting – and less than one per cent of all households (skewed heavily toward the wealthiest) would be eligible for benefits in excess of $5,000. 

Not only would this policy deepen inequality in Canada by giving a costly tax giveaway to those who need it least, but the rewards would be distributed in an unequal manner across the country. The percentage of families with children under 18 that would receive no benefit from income splitting is highest in Quebec (61.1 per cent). Consider that this is the province where census data show that poverty in the Jewish community hovers near 20 per cent. 

Research from organizations across the political spectrum have demonstrated that, in addition to being based on a non-egalitarian premise, the tax policy will cost the federal treasury $3 billion in 2015.  With so few families set to benefit, this means the policy will come at a net cost to many Canadians.

The Jewish community has reason to be concerned, not only because the majority of targeted families would receive no benefit, but because it could increase the amount of resources the community spends supporting low and middle income families. That is funding that could otherwise go toward supporting institutions such as schools, summer camps and synagogues. 

More fitting public policies, which could provide support to the families that need it as well as close the glaring professional gender gap, would be to improve parental benefits under employment insurance or increase child tax credits. Better yet, the Jewish community and Canadians in general would benefit much more significantly by enhancing access to quality and affordable child-care services. These kinds of investments could save families money and help build up vital public service that we all benefit from.

The budget – including our tax code – is a moral document. It is one that reflects our collective Canadian values. As a Jewish community, we ought to be vocal about a tax scheme doesn’t pass the moral sniff test. 

This Conservative policy is offside. We need a government to enact policies that benefit the majority of families in our community, whether low-income, single parent or women seeking the possibility of leaning in to their careers. 

Mira Oreck is the director of strategic partnerships at the Broadbent Institute.