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These are Canada's new tax brackets and income tax rates in 2024 (www.ctvnews.ca)

submitted 10 months ago by [email protected] to c/[email protected]

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cross-posted from: https://kbin.social/m/[email protected]/t/769112

These are Canada's new tax brackets and income tax rates in 2024

Cooler inflation in 2023 is affecting how much Canadians will pay in income tax this year.

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[–] [email protected] 1 points 10 months ago* (last edited 10 months ago) (1 children)

I don't get your take. For the same nominal income you pay less taxes. For the same real income you pay the same taxes.The only way you pay more taxes is if your income grows faster than inflation.

For people on fixed incomes or who don't see pay raises the decrease in taxes paid is actually a benefit. If the tax brackets weren't pegged to inflation than those same people would be worse off.

[–] [email protected] 2 points 10 months ago

The article says that “Most taxpayers would view this outcome as a ‘good thing.’” But that is only true if, contrary to fact, "most taxpayers" have lower income growth than inflation.

I think we're talking past each other a bit instead of really disagreeing. I get your perspective that, given that one's income is fixed, it's better to pay less in taxes to reflect how much poorer you've become. Sure, that makes sense.

But here's another perspective: the tax brackets are adjusted for inflation because inflation exists. Income tax wouldn't function otherwise. So, if you're paying less nominal taxes, it's only because this year you're poorer than the last. That is a strange thing to celebrate.