Income Splitting and Gender Equality: The Case for Incentivizing Intra-Household Wealth Transfers

22 Pages Posted: 24 Feb 2010 Last revised: 26 Oct 2014

See all articles by Lisa Philipps

Lisa Philipps

York University - Osgoode Hall Law School

Date Written: February 22, 2010


In all countries that use the individual as the basic unit of taxation, tax policy makers must contend with the problem of spousal income splitting and the dilemma it poses for gender equality. On the one hand income splitting opens a back door to joint taxation of couples, with its troubling labour market disincentives for second earners. Yet attempting to prevent this type of avoidance planning by ignoring inter-spousal transfers for tax purposes disrespects women’s individual agency over property to which they hold legal title, and may close off one source of economic power for those who do the bulk of unpaid work. This tax policy issue thus engages fundamental, normative debates about the meaning of gender equality and whether it is possible to enhance women’s access to markets while also valuing and compensating their unpaid contributions. The paper argues that a way through this dilemma is to differentiate between forms of income splitting that enhance the economic autonomy of a lower-earning spouse and those that entail no meaningful sharing of economic power but merely reduce tax for the transferor. While the former should be aggressively constrained, a gender-equality case can be made for more liberal treatment of genuine intra-household transfers, if combined with other measures that reduce the costs to second earners of entering paid labour. The paper criticizes recent Canadian reforms that expand the scope for notional income splitting, without demanding any real redistribution of underlying assets or income.

Keywords: taxation, gender, wealth, income splitting, equality

JEL Classification: K34

Suggested Citation

Philipps, Lisa, Income Splitting and Gender Equality: The Case for Incentivizing Intra-Household Wealth Transfers (February 22, 2010). CLPE Research Paper No. 04/2010. Available at SSRN: or

Lisa Philipps (Contact Author)

York University - Osgoode Hall Law School ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3


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