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Finance Minister Jim Flaherty holds a press conference in Ottawa on Oct. 28, 2013.
Finance Minister Jim Flaherty holds a press conference in Ottawa on Oct. 28, 2013.
(SEAN KILPATRICK/THE CANADIAN PRESS)

How a tax change would help voters that Conservatives want

When Jim Flaherty introduces his budget next week, he may trumpet a long-promised policy that would allow parents with children at home to split their income to reduce the amount of tax they pay.

Income splitting is a tax policy that would allow a higher-earning person to assign some of his or her income to a spouse, effectively lowering what tax bracket he or she is in. The policy brings the most benefit to a couple in which one spouse works while the other stays at home with the kids, and could cost the treasury a few billion dollars of lost tax revenue a year.