The Conservative government is considering allowing Canadian couples to split their incomes to reduce their family's overall taxes, Finance Minister Jim Flaherty confirmed Tuesday.

Flaherty said Thursday's economic statement will spell out tax cuts the Harper government wants to implement in the 2007 budget and subsequent budgets. 

Those cuts could include lowering income taxes, capital gains taxes, and cutting the GST by another percentage point. 

He hinted that it may include extending the income splitting move he announced last month for senior couples to all other couples.

"That's a possibility. I wouldn't put it any higher than that … It's one of the issues we'll look at as we prepare for the 2007 budget," Flaherty told journalists on Tuesday.

Full income splitting could cost Ottawa up to $5 billion a year in lost tax revenues, according to some estimates.

Under current tax policy, Canadians file taxes as individuals, not as a couple. The idea of income splitting is to reduce a family's tax burden by allowing couples to pool their incomes — something that would shift income from the higher income earner in a couple to the lower earner, resulting in lower overall taxes.

In late October, Flaherty said a move to allow wider income splitting "is worthy of study and we are reviewing it."

The government announced pension income splitting for seniors on Oct. 31, the same day it brought in new taxes on income trusts.

With files from Canadian Press