When you're looking at efficiency, really you're looking at the marginal tax rates. Income splitting does raises the marginal tax rate faced by the lower-income spouse. What we know is lower-income spouses are most likely to be women, and women are more responsive. They are more sensitive to changes in the tax rates so their labour supply is more easily distorted, and that's where there are efficiency costs.
I know Jack Mintz is in favour of income splitting, but he really is pretty much a lone voice among economists.