Fairness can be an ambiguous thing. And tax fairness, which always involves winners and losers, is perhaps the most elusive of all.

From one perspective, thousands of families are callously penalized under Canada’s existing tax system, in cases where one spouse earns considerably more than the other.

“That is not fair,” Prime Minister Stephen Harper earnestly declared in 2011. By way of a remedy the Conservative Party proposed that couples be allowed to split a higher-earning spouse’s income for tax purposes. This could shift that earner to a lower tax bracket and result in a smaller overall tax bill.

But hold on. Such couples don’t deserve a break, say a host of respected economists. In this view, income splitting would be unfair to the vast majority of Canadians who wouldn’t benefit at all. Even the late Jim Flaherty, Conservative finance minister for eight years, expressed doubts before he died. But Flaherty’s successor, Joe Oliver, has said he supports what’s in the party platform – so there’s a good chance the Conservatives will revive this promise when they campaign for re-election next year.

Still, the proposal amounts to “an expensive tax gift for the rich,” says David Macdonald, senior economist for the left-leaning Canadian Centre for Policy Alternatives. It “creates a tax loophole big enough to drive a Rolls Royce through.”

In fairness (there’s that word again) both sides have a reasonable argument. But a country’s tax policy can’t be built on that fuzzy generalization. Hard lines can — and must — be drawn.

An important objective of tax policy should be equivalent treatment of Canadians. The rich are deservedly taxed more than the poor but within each group, in general, burdens are ideally shared as equitably as possible. Proponents of income splitting insist this principle is being violated.

To understand how, consider an example provided by Macdonald in a study released earlier this year. He compares two hypothetical couples with an $80,000 income. One pair consists of dual earners collecting $40,000 each. The other is a sole job-holder, making $80,000, living with a stay-at-home spouse.

That one earner surrenders $14,520 in federal tax while each member of the two-income couple is subject to a lower rate, resulting in a total federal tax bite of $12,000. With identical incomes, one couple pays $2,520 more in tax. That can mean a lot to people raising a child.

Assuming the mantle of Canada’s family values party, the Conservatives have proposed income splitting for couples with children under 18. The party’s 2011 policy platform would allow transfer of up to $50,000 in taxable income from one partner to the other, to be introduced when the federal deficit is eliminated.

Ottawa is poised for a budget surplus next spring. So this promise seems ready for delivery. But a chorus of intelligent voices is warning that income splitting in fact constitutes an injustice.

A study by the business-minded C. D. Howe Institute concluded that 85 per cent of Canadian households would receive nothing. That was echoed by Macdonald, at the Centre for Policy Alternatives, who reported that “86 per cent of all families would gain no benefit whatsoever from this tax loophole.” That doesn’t sound fair.

In the interest of clarity it’s worth noting that these studies include childless couples and even single people with no dependants at all. Most Canadians wouldn’t describe such individuals as a “family.” Macdonald crunched his numbers again when asked to narrow his analysis to adults living with children under the age of 18. By that definition, he found that most Canadian families — 56 per cent — would benefit from income splitting, while 44 per cent would see no gain.

That’s better than neglecting 86 per cent. But here’s where the argument for income splitting unravels: even by the most favourable definition, almost half of Canadian families would be overlooked in a program that would cost the federall treasury about $3 billion each year. Among those passed over would be single parents, typically women, struggling to raise a family on their own. Their income tends to be low and they have no one to split it with. So they and their children get nothing.

Don’t these families have value? Even those in line for money don’t share the windfall equally. The closer a family drifts to Canada’s bottom tax bracket, the less it stands to gain. Splitting a pittance adds up to little. This policy would provide more relief to the affluent than the poor, and that’s not fair. Furthermore, a great many couples where one partner’s earnings are only a bit higher than a spouse’s would get minimal benefit.

Best off would be the traditional family, where one often well-rewarded partner works while the other stays home to raise the children. It’s unfair to characterize these folks as Rolls Royce-driving fat cats. But they typically aren’t in serious need.

What about principle? The traditional family may not be suffering, but aren’t these people entitled to equal handling under a tax system that should treat Canadians in similar economic circumstances the same way?

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Well, not necessarily. Circumstances differ. Dual-earner families face extra costs that can gobble up a big portion of after-tax income. For example, a family with children raised by a stay-at-home spouse generally doesn’t pay for daycare — a saving of hundreds of dollars a month per child. Commuting costs, whether by car or public transit, are often doubled for a family with two earners. And many jobs require spending on such things as work clothes, which isn’t incurred by someone staying home.

Considering real world circumstances instead of only narrow tax provisions, two-parent families supported by a single-income earner don’t suffer as much injustice as supporters of income splitting would argue.

Generalization has its limits. All responsible parents strive to raise their children as best they can, and most would surely welcome a tax break. But income splitting isn’t the best way forward. It would help some families, but too few and not those truly in need. While pure equity remains elusive, one thing is clear: this proposed tax change would subvert true fairness and should be rejected.

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