Invest in Canada

Tax relief for lower, middle-income earners

by investor on 30/01/09 at 1:41 pm

As expected, the Tories’ just-released Recession-fighting budget delivers tax relief to lower- and middle-income Canadians by bumping up the thresholds on the lowest tax brackets. Added to an increase to the basic personal amount that is exempt from taxation, and various measures directed at home owners and home renovators, Budget 2009 has some tax relief for everyone.

In part, that’s because even higher-income earners benefit when more income is taxed at the lowest rate of 15%, or more income is taxed at 22% rather than 26%. Budget 2009 increases the basic personal amount to $10,320, moves the threshold for the 15% lowest-tax bracket to $40,726 of income, and moves the upper limit of the second tax bracket to $81,452. Keep in mind we’re talking only the federal rate of tax here: Tax rates are considerably higher when you add in provincial income taxes.

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