From bydeway.com

Last week, Stephan Harper followed through with an election promise and introduced a package of tax breaks for families with children under 18. According to an article published in the National Post, included in this package is the ability for young families to “split-income” and transfer up to $50,000 between spouses in order to collect a tax credit of up to $2,000.

The reason for this new tax break is that single income families currently pay more tax than dual income families. For example, a family where one spouse earns $100,000 and the other earns $0 pays more tax than a family where each spouse earns $50,000.

Clearly, this old system is unfair, and I think the decision to allow families to split income is a just one. I also believe it is important that this credit only be available to families with children. This ensures that both spouses are contributing to society, as the one that is not earning income is providing care for their children.

However, even under this new ruling dual income families will still at an advantage because the maximum tax credit allowed is $2,000, and the maximum income that can be transferred is $50,000. This tax break has the advantage of looking really good young families, while dealing minimal damage to the government’s budget.