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Email this8:12 pm
April 6, 2013
Offline
Loonie said
My recollection is that, during the 1970s/80s, when I began investing in RSPs, there were more federal tax brackets than there are now in the under-100K category. Can anyone verify if this is correct, and waht taxation rate applied then?
I know I could look it up in my old papers, but that requires a lot of work and perhaps someone else has it available more conveniently?
Yes, there were more brackets.
CRA has the tax return packages back to 1985 at Tax packages for all years.
12:03 am
October 21, 2013
Online
thanks, Norman.
While this does not go back as far as I would like, it is instructive.
In 1985, for taxable incomes ranging from $12,950 to $62,160, there were 4 federal tax brackets. I can easily see why I would have found it believable, at that time, that I would fall into a lower tax bracket upon retirement. Now, with fewer and broader brackets, this is not the case. The thing that I could not anticipate is the change in brackets. I doubt that I even realized they could change back then. I don't recall this ever being addressed in the financial planning industry, at least not in the things I've been exposed to.
Now, for another instructive example, take a look at the difference between current tax brackets for Ontario and those proposed by the now-defeated Liberal government. These were not put into law, but they illustrate how radically tax brackets can change with the stroke of a pen.
https://www.taxtips.ca/ontax/on-proposed-2018-tax-rates.htm
This has implications for those considering present and future benefits of RSPs.
Please write your comments in the forum.