It’s April 2012 — do you know what your tax rate is?
The answer to that question, of course, depends on what rate we’re talking about. Is it your marginal tax rate? Or your average effective tax rate? The difference may surprise you.
What may also surprise you is that your tax rate, however calculated, is largely dependent on the type of income you earn. Employees or entrepreneurs with an unincorporated small business will likely pay tax on the majority of their income at full ordinary income rates, whereas investors who earn a significant portion of their income in the form of Canadian dividends or capital gains will face much lower rates.
To get a good picture of how much tax Canadians pay and what our tax rates actually are, let’s take a closer look at our tax system. ... Read more