Tax System in Ontario essays

Tax System in Ontario essays The issue is whether Ontario should have a different tax system than the federal government of Canada. The provinces already have different ways of calculating taxes from the federal government and from one another. Verburg (1998) noted five years ago that the taxpayers in Ontario and Alberta were benefiting form an effort by each to have the lowest taxes in Canada. Still, Verburg also noted that the tax cuts to that time were not very substantial even as each province was trying to become the most attractive province in which to do business for the North American economy. Alberta long had the lowest personal income-tax rate in Canada, but the Ontario government set out undercut Alberta by half a percentage point by lowering its basic personal income-tax rate to 45% of the basic federal tax. Alberta answered this soon after by cutting its basic rate to 44%, at which time Ontario countered with 40.5%. Verburg cheered them on, stating that "the two provinces are chipping away at Canada's burdensome tax Verburg further noted that Ottawa was not responding with the same On a recent swing through Alberta, federal Finance Minister Paul Martin said giving Canadians a break on their income tax is "a major priority" for the 1999 federal budget, when a multibillion-dollar budget surplus is expected. But, so far, there has been no firm commitment to return those extra dollars to the people who earned them The Ontario income tax system changed how it calculates the tax beginning in 2002 so that it now levies its personal income tax as a parentage of taxable income rather than as a percentage of basic federal tax. This system is known as tax-on-income (TONI) system, and it is used to allow Ontario to set its own tax brackets and tax rates independently of the federal system, and so provides the Province with direct control over many features of the ...