Men benefit from tax incentives significantly more than women do, according to an analysis of federal tax breaks and loopholes by the Canadian Centre for Policy Alternatives (CCPA). The group calls for a comprehensive review of tax expenditures and the closure of loopholes that “exacerbate inequality.”
In Are Tax Loopholes Sexist? The gender distribution of federal tax expenditures, CCPA senior economist David Macdonald found that, of 45 federal tax expenditures (deductions, credits, breaks and loopholes), only eight (19%) pay out more to women than men.
“Simply put, federal tax breaks are sexist, with men faring much better than women under the present system,” Macdonald said in a statement.
The top five tax breaks that benefit men disproportionately are the employee stock option deduction; the foreign tax credit for individuals; the spouse or common-law partner credit; registered retirement saving plans; and pension income splitting.
Women benefit most from the eligible dependent credit, the child care expense deduction, the medical expense tax credit, the pension income credit and the age credit, the report found.
“In some cases, men captured more than 100% of the benefits from certain loopholes,” implying a tax increase for women, the CCPA said in a news release. This is particularly apt in the case of pension income splitting, which typically lowers men’s tax obligations but raises what their female spouses owe.
While the current federal government has been vocal about its intention to address the gender pay gap and advance gender equality overall, “little attention has been paid to how the tax system may be reinforcing disadvantages,” Macdonald said.
“Tax breaks that are not serving their purpose, exacerbate inequality or fail to promote gender equity should be closed and the substantial lost revenue should be put to better use.”