Income splitting

Income splitting is a tax policy of fictionally attributing earned income of one spouse to the other spouse for the purposes of assessing personal income tax (i.e. "splitting" away the income of the greater earner, reducing his/her income for tax measurement purposes), thus reducing tax rates paid by the spouse who earns more and increasing rates paid by a spouse who earns less (or nothing). In a progressive tax system, income splitting reduces the total tax paid by the couple.