United Future leader Peter Dunne's bill to allow parents with dependent children to split their income for tax purposes has scraped through its first vote in Parliament.The proposed legislation – dubbed the Taxation (Income-sharing Tax Credit) Bill
United Future leader Peter Dunne’s bill to allow parents with dependent children to split their income for tax purposes has scraped through its first vote in Parliament.
The proposed legislation – dubbed the Taxation (Income-sharing Tax Credit) Bill - is one of United Future’s core policies.
Up to 310,000 families would be eligible for income-splitting under the bill and could save up to $9000 a year on their tax bills, depending on circumstance.
Inland Revenue has estimated that the bill could cost the government up to $460 million in revenue costs in the 2012/2013 tax year – plus annual operating costs of up to $4m.
Two-parent families with one working parent on a high income stand to benefit the most under the bill. At the other end of the spectrum, families with sole-charge parents would not be considered eligible.
Mr Dunne said last night that he was aware that this aspect of the bill could be viewed as an infringement on human rights – but pointed out that arrangements such as Working for Families are already in place to cater for sole charge parents.
He said that an earlier discussion document on the proposal had returned 90% of submissions in favour of some form of income-sharing.
The bill passed its first reading last night on a 64-54 vote with the support of National, the Maori Party and Mr Dunne.
Labour opposed the bill on the grounds that it will favour high income earners.
The Finance and Expenditure Select Committee will now hear public submissions on the bill.
