Not only the aggregate level of taxes but also the type of taxes imposed vary from jurisdiction to jurisdiction. In fact, there is considerable variation in the reliance that individual jurisdictions place on particular tax fields.
Governments across the world rely on five primary sources of tax revenue: personal income taxes, corporate taxes, sales and excise taxes, property and wealth taxes, and payroll taxes (typically as contributions for social security and other social benefits). In Canada, all five forms of taxes are used to finance public services, which will be discussed in some detail below and in more extensive detail in later parts of this book.
Canadian governments rely foremost on personal income taxes as a source of revenue, as figure 1.5 demonstrates. These taxes are assessed on individual incomes, which are composed of taxable worker earnings and income from savings, including interest, dividends, and capital gains. Personal income taxes as a share of the GDP have grown from 10 percent in the early 1970s to as high as 15 percent by 1990, because governments ramped up personal taxes to deal with rising deficits. As federal, provincial, and territorial governments returned to improved fiscal health after 1995, they reduced personal income taxes to about 12 percent of the GDP in 2008
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