What is it about income splitting that benefits families and why is United Future determined to keep working for this to become a reality?

Income splitting benefits families because the income of both parents is combined and then divided equally, which can mean that they pay less tax since it is levied at a lower rate. For example, if one partner earned a salary of $75,000 under income splitting, the salary would be divided equally between the husband and wife. So each share of $37,500 would be taxed at 19.5 %, or $7312.50. The family would be $3,945 a year better off than under the current tax regime.

United Future is committed to seeing income splitting become a reality because it believes splitting a family’s income for tax purposes will ease the tax burden many New Zealand families face, and, just as importantly, recognises that there are many parents who are prepared to forgo all the material advantages a double income would bring them in favour of one of the parents staying at home to ensure their children are raised in a warm and loving environment.

Income splitting recognises the social benefits that accrue to a society that has a strong family and community structure.

Income splitting attempts to recognise the costs of raising a family, and in particular, those situations where one parent is either a full-time carer for their children or works parttime. Just as the government subsidises childcare for those returning to work, it should also acknowledge the contribution of those who have decided to forego a double income to stay at home with their children.

This is an investment in the future of our country that we cannot afford not to make.

Last Update: 7 December 2008

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