Mr. Speaker, it seems what we thought might be a fairly calm debate could be a lively one.
We are debating an important motion which has been a long time coming to the floor of the House. The motion reads:
That, in the opinion of this House, the federal tax system should be reformed to end discrimination against single income families with children.
Single income families have long known that they are disadvantaged by the Liberal tax policies and it keeps getting worse. For example, a single income family earning $60,000 will pay $9,589 in taxes, but a two income family making the same $60,000 pays only $5,790 in tax.
The single income family pays 65% more taxes in this tax bracket. It is the same scenario at $50,000. The result there though is actually worse with 91% more in tax paid by the single income family. The lower we go, the worse it gets. At $45,000 the single income family pays 136% more, and so it continues.
In addition, the dual income earning family can deduct child care expenses if children are cared for in institutional day care programs which would serve to further reduce the tax paid by the dual income families compared to single income families.
Even after a decade of petitions and lobbying the Liberal government each year adds to the discrepancy between the tax paid by single income families and dual income families.
Single income families pay more in tax on the same income. They also miss out on the $7,000 allowable child care expense deduction if children are put in institutional day care programs. To add insult to injury, a parent who is at home is treated as somewhat less of a person in that he or she receives a basic spousal deduction of almost $1,100 lower than what every other working Canadian receives as their basic personal exemption.
A number of other voices are joining with Canadian families in the call for more equitable tax treatment. The Canadian Council on Social Development and the Vanier Institute in 1998 noted that average Canadian family after tax incomes have substantially fallen in recent years.
The C. D. Howe Institute, the National Foundation for Family Research and Education, and the Fraser Forum have all now reported that there currently exists unjustifiable inequities in the current tax treatment of families. For example, the C. D. Howe Institute, when referring to the child care exemption deduction, said:
—it is difficult to find a rationale for the CCED in the desire to achieve greater equity in the treatment of dual earner versus single earner couples, since families that care for their own children have lost all tax recognition for their children.
Reformers have long been aware of the need for fair family taxation in Canada, specifically in past budgets and again in this year's budget. Reform proposed an alternative budget. We detailed a fully costed out proposal that provides substantial tax relief to all families. In addition, we detailed a fully refundable tax credit for all parents regardless of how they choose to care for their children. It is not a tax deduction but a credit that would be equal in benefit to all parents whether or not they had taxable income.
We say let us leave the money and the child care choices with parents where they belong. Reform has long called for the basic spousal exemption to be equal to the basic exemption. Today the exemption for a stay at home parent is $1,100 less than for a working parent.
The financial considerations are important but also important are the social messages current tax policies send. Let us examine some of that social messaging. We know that family situations are dynamic and changing in Canada today. Parents are doing the best they can. Sometimes parents provide child care at home. Sometimes an extended family member helps with the children. Others share their responsibilities with friends or with local community groups. These and a dynamic variety of other arrangements occur.
Why does the Liberal government give a $7,000 tax expense deduction to institutional day care but there is no recognition of any other type of care? It sends the message that parental or extended family care has no value. This is wrong. A refundable child tax credit to all parents leaves the money and the child care choices with parents where they belong.
What about the message to stay at home parents when the basic spousal exemption is $1,100 less than everyone else's basic exemption? For many the message according to the Liberal tax code is that they are less than complete people, that they are second class people. This is a wrong message.
Often these same parents have chosen to devote the majority of their time to the nurturing of their children, Canada's next generation. Do members not think that is valuable work? Then why does the Liberal government continue the message to them through the tax code that what they are doing is less valuable than the work done by every other Canadian?
Reformers say that the basic exemption should be the same for all including parents at home. A recently formed national coalition called the Canadian family tax coalition called on the government to allow income splitting by families. This would allow both parents to pool their incomes and divide it equitably between spouses to reduce total taxes paid.
It would also increase the equity of dual income families. This is not a foreign or unique concept. This kind of thing has been done in many other countries including France, Germany and the United States. Reform supports the examination of joint filing or income splitting, perhaps through a parliamentary committee and some public input, to assess the impacts and to advance us toward more equitable tax treatment of single income families in line with today's motion.
The C. D. Howe Institute stated in a very recent review of the family taxation system that the take portion of Canada's tax system, the revenue raising part, assesses taxes on an individual basis but the give portion, the many spending programs, calculates benefits on a family basis. It asked the question whether this inconsistency was defensible. I suggest it is designed to raise the maximum amount of revenue and pay the minimum amount of benefit.
In the same report the C. D. Howe Institute stated that the Canadian Income Tax Act was no longer about tax policy and that social policy had become an increasingly integral part. The institute continued by indicating that, whatever the merits of that side of the act, social policy considerations had crowded out legitimate tax policy objectives.
That is our point today. We are calling on every member to use this opportunity to address the anti-family discriminatory social policies inherent in the current structure of the tax code.
With that in mind, I would like to move an amendment to strengthen the current motion on the floor:
That the motion be amended by inserting before the word “end” the word “permanently”.