The federal government announced recently that it will appeal a controversial decision which concerns the taxation of child support payments. The Supreme Court of Canada agreed to hear the government’s appeal and stayed the lower court’s ruling in Susan Thibodeau’s challenge to federal tax laws.
As it stands now, the non-custodial parent (usually the father) pays some form of child support. The amount paid is deducted “off the tip,” reducing his taxable income and is then considered to be part of the mother’s income. Thibodeau argued that this is a form of sex discriminations because it benefits men and penalizes woman.
Intact families bear tax burden
This policy treats child support as though it were a charitable donation, rather than the moral and financial obligation which exists whether or not there is a marriage. It suggests that non-custodial parents need financial incentives to carry out their most basic parental duties. Indeed the increased tax burden borne by intact families and others means they must effectively subsidize the lifestyle of absent parents.
Another possible impact of change to tax policies on child support is that courts may become clogged with fathers looking for reductions in their child support payments. They argue that judges consider the tax implications when assessing child support orders. Therefore, if they no longer receive the tax deductions, the real cost of their payment will increase.
This may be a reasonable argument, but it is not an insurmountable problem. Perhaps any fundamental change to tax laws which will affect so many people should be implemented gradually. But fairness in taxation is demanded by justice.
Discrimination, whether it is against women or against intact families, should be corrected, but it is not discrimination per se which is the real problem with this particular tax policy. Government policy, including tax laws, should support intact families. It need not do so out of a moral imperative, (although that would be nice), but because stable families make for a stable society.
It is in the county’s self-interest to encourage intact families. The direct and indirect costs to various social welfare programs, to the justice system education and even health is driven up by absent parents.
At worst, policies should be neutral. In this case, by allowing fathers who live apart from their children to benefit financially from their separation, the government is contributing to family break-up.
Divorce a tax break?
It may be ludicrous to suggest that a man would leave his family for a tax break, but it is reasonable to suggest many would rethink the decision to leave if leaving had higher financial and social costs. Perhaps our society is past prohibiting divorce, or even fathering children outside f marriage, but why must we accept such irresponsible behaviour as though it had no social costs?
The first responsibility of parents is to their children. It is difficult to reconcile broken or never-formed families with the needs of children. Nevertheless, given the current state of some families, we should at least require that fathers provide real support for their children. Child support should be the first priority. It is the parents who should live with what is left over. Not the other way around.
If child support payments reflected the actual financial needs of the family, no doubt fever non-custodial parents would enjoy the freedom they do following divorce. In the vast majority of cases, divorce improves a man’s standard of living and impoverishes his wife and children. I am sure that a man who is required to pay what it actually costs to support his family (allowing for an appropriate contribution from the mother) would be viewed as less of a “catch” reducing his ability to repeat his irresponsible behaviour.
Some might find that harsh, but the current reality is that the children are expected to bear the emotional and financial cost of divorce – and they do!
One of the greatest problems of Canadian society is the crisis of absent fathers. Soaring divorce and illegitimacy rates create an enormous economic cost to taxpayers. The rate of noncompliance to child support payments is greater than fifty percent.
While some say increasing the cost of child support for non-custodial parents would only increase delinquency, society must respond with zero tolerance for irresponsible parents.
The Thibodeau case concerns only a particular area of tax policy. However, it could become a catalyst for meaningful reform.