Description
The major source of federal revenues is the personal income tax. Indicate three other types of taxes
that contribute to federal revenues.
2. What is the meaning of “person” when the term is used in the Income Tax Act?
3. Briefly describe the procedures used in calculating provincial income taxes for individuals in
provinces other than Quebec.
4. The Canadian income tax system is often used to achieve various economic objectives. Give three
examples that illustrate this point.
5. Provide an example of how taxation policy can be used to influence resource allocation.
6. The government pays a “child tax benefit” to the parents of children who are under 18 years of age.
The payments are reduced by a percentage of income in excess of a specified level. What
objectives are achieved by this benefit system?
7. Indicate three disadvantages of a tax system that uses progressive rates.
8. A regressive tax is one that taxes high income individuals at lower effective rates. Explain why a
sales tax levied at a flat rate of 8 percent can be regressive.
9. Distinguish between horizontal equity and vertical equity as these terms are used in describing tax
systems.
10. What are some of the factors that have led to the entrenched use of tax expenditures as opposed to
program spending
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