Hi all
This may be a bit more UK focused, but from what I can see it applies to a good few other countries too.
In the UK, personal income tax is graded based on income, with a tax free threshold, then the basic income tax level between £~12,000 to £50,000, then a higher rate above £50,000, then another band too. This seems fair as the more you earn, the more of that ‘higher’ income gets taxed.
Why isn’t this the same for corporation tax? This is a flat rate regardless of turnover/profit, with small companies having to pay the same proportion of their profits as large multinational companies. Wouldn’t it be fairer to have bands like personal income tax?
In: Economics
In Canada, there is a Federal Tax Rate for corporations of 38%. Then there is a 10% rebate for income earned entirely in Canada, so for resident corporations, this reduces the tax rate to 28%. Then there is a further General Tax Reduction rebate of that reduces the Canadian sourced income rate to 15%. For small businesses (under $500K income) instead of the General Tax Reduction, there is a Small Business Deduction of 19% which would bring the small Canadian small business tax rate down to 9%. Both the GTR and SBD only apply to active business income – i.e. not passive investment income.
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