Looking through Canada's culture section on wikipedia, it's described as having:

Government policies such as publicly funded health care, higher taxation to redistribute wealth, the outlawing of capital punishment, strong efforts to eliminate poverty...

However, looking into taxation in Canada their income tax of 31.6% (if single with no children) and their corporation tax seems fairly lower then, for example, the higher rate of tax in the UK (45%).

Why is Canada regarded to have policy in high taxation to redistribute wealth when their taxation actually appears to be fairly low?

  • $\begingroup$ Could you indicate the basis of the 31.6% (eg what income level it applies to, whether it includes provincial as well as federal income tax)? The UK 45% income tax rate applies only to any slice of income in excess of about GBP 160,000, so most people pay no tax at that rate. $\endgroup$ – Adam Bailey Feb 3 '17 at 17:03

Because they are high in comparison. Take a look at the data from the OECD here, for 2015. I have plotted them below:

enter image description here

(The red is the personal income tax set by law, and the blue is the one adding tax credits, as far as I understand).

As you can see, rates in Canada are quite high in comparison with other OECD countries like Estonia or Poland, and also higher than the UK.

Also, in international comparison, Canada is quite good in redistributing income. You can see that by comparing the Gini index before and after taxation:

enter image description here

Property taxes are quite high too:

enter image description here

The final evidence comes from this index of progressivity of both personal income tax and social security:

enter image description here


Canada is quite a progressive country in terms of taxation, redistribution quite a lot, and lowering market inequality considerably. Even more, it seems to be better than the UK in almost every comparison.

Source: OECD (2012).

  • $\begingroup$ +1 Important to note that the first chart compares top rates (not average rates) of income tax, which start at very different income thresholds in different countries. The OECD table shows the thresholds as a multiple of average wage - very similar for Canada and the UK, but both are much higher than, eg Estonia. $\endgroup$ – Adam Bailey Feb 4 '17 at 16:01

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