Tuesday, September 13, 2016

Tax Brackets and Marginal Tax

11:34 AM


Question:

How do you determine the tax bracket/marginal tax many years in the future?

Answer:

The program assumes brackets, credits and other amounts will grow each year by the rate of inflation.

Most provinces automatically index these amounts each year. We assume brackets are indexed for provinces who don't automatically index because they eventually update them, and it would not be realistic to have a model using fixed brackets in 20 or 30 years.

Note that for RRSP limits and YMPE increase in line with the average wage.


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