This report finds that the benefits of small business income splitting, also known as income sprinkling, are concentrated amongst Canada’s richest and that the loophole is not used by the vast majority of families declaring small business income. In fact, the report estimates that only 5 per cent of families receiving small business dividends are actively using income splitting. The report further analyzes who benefits from income sprinkling by income, gender and industry, and recommends that the federal government move ahead with closing the loophole, as well as implement a broader package of tax reforms aimed at making the taxation system more fair.
Splitting the Difference
Who really benefits from small business income splitting?
September 26, 2017