E&Y have analyzed current Alberta tax rates and we may draw some conclusions from these data:
Investors | Taxable Income | Marginal Rate on Interest | Marginal Rate on Dividends | Equivalency Factor |
Widows & Orphans | $30,000 | 25.00% | 0.01% | 1.33 |
Professionals | $75,000 | 32.00% | 4.41% | 1.41 |
Plutocrats | $150,000 | 39.00% | 14.56% | 1.40 |
It is interesting to note that the equivalency factors have increased slightly since my 2006 post on this topic.
I’m going to needle you about the rates on orphans again, because the E&Y calculator assumes no income of any other kind whatsoever. If there is any, then the marginal rate on eligible dividends in the lowest bracket in Alberta is -5.7% and the interest equivalency factor is … drumroll … 1.41.
[…] Equivalency factors have declined marginally since my 2006 post on this topic. […]