ECON 1000 Lecture Notes - Lecture 12: Tax Rate, Payroll Tax, Consumption Tax
Document Summary
Chapter 12: the design of the tax system. Governments have taxes to pay for themselves. Sometimes federal programs pay for provincial things: done through transfer programs. Equalization payments: help pro(cid:448)ide things poor pro(cid:448)inces can"t do on their o(cid:449)n, the federal government. Biggest source of revenue is income tax. A person"s tax liability is based on income: not necessarily proportional to ones income, total income other contributions. Marginal tax rate: the rate of tax applied to each additional dollar of income. Tax brackets: 5 tax brackets depending on how much income you make: the higher bracket you are in, the larger percentage of income you pay in taxes. In canada it is shared by employers and employees. Remainder goes on program spending: mostly expenditures. Budget surplus: an excess of government receipts over government spending: provincial/territorial and local governments. A bunch of provincial money comes from federal transfers. Most important source of revenue is income tax.