Performance Indicator 6: Tax Rate
Where BC Ranks, Provincial Comparison |
|
| Year |
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
Rank |
9 |
3 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
|
Performance Indicator Six follows the combined federal-provincial tax rate on the highest income bracket.
BC’s top marginal personal tax rate of 43.7
percent was the second lowest among the
provinces in 2009, the same rank it has held
since 2002. Nova Scotia had the highest rate
and, therefore, the worst rank in 2009.
Alberta had the lowest rate, and earned the
top rank over the 2000 to 2009 analysis
period.
Why It's Important
The top marginal (combined federal and provincial) income tax rate is a key factor in a jurisdiction's ability to attract and retain highly skilled workers and leading
innovators. High marginal tax rates tend to discourage additional work effort and lessen the growth of real GDP. The top marginal personal income tax rate is the combined
federal-provincial income tax rate levied on the highest income bracket. The top rate takes effect at various income thresholds as noted in the box
below. |
| Federal and Provincial Top Marginal Tax Rates and Income Thresholds for Individuals - 2009 |
| |
BC |
AB |
SK |
MB |
ON* |
QC** |
NB |
NS* |
PE* |
NL* |
Federal |
| Tax Rate(%) |
14.70 |
10.00 |
15.00 |
17.40 |
17.41 |
19.22 |
17.00 |
19.25 |
18.37 |
15.50 |
29.00 |
| Income Bracket |
$99,589
and
over |
All income |
$114,611
and
over |
$67,001
and
over |
$73,699
and
over |
$76,771
and
over |
$116,106
and
over |
$93,001
and
over |
$63,970
and
over |
$62,122
and
over |
$126,265
and
over |
Notes: * Ontario, Nova Scotia, Prince Edward Island and Newfoundland and Labrador levy surtaxes in their personal income tax systems; the income brackets shown are those that apply to the top statutory rates.
**The abatement of basic federal tax is incorporated.
Sources: KPMG; Taxtips.ca |
North American Comparison
Seven states levy no personal tax so the top marginal rate in these jurisdictions is the federal rate of 35 percent. This is below Alberta's 39 percent.
British Columbia's top marginal income tax
rate of 43.7 percent is slightly below that of the
states identified as having the highest personal
income tax burden.
In general, combined federal-provincial rates in
Canada are higher than the combined federal-state
rates south of the border.
A more thorough review of BC's and Canada's international tax competitiveness is
available in the Business Tax Competitiveness Topic Box.
Note
A North American rank is not practical for
this indicator because of the difficulties in
comparing tax systems for all the states to
those in the provinces. |
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