Question

Which of the following factors MOST often prevents the ITA from achieving perfect integration between corporate and individual​ taxes?

A.

varying federal tax rates

B.

the application of different tax rates to individuals and corporations

C.

varying provincial tax rates

D.

the application of different tax rates to different types of corporations

Answer 1

The correct answer is B.the application of different tax rates to individuals and corporations.

The application of different tax rates to individuals and corporations often prevents the ITA from achieving perfect integration between corporate and individual​ taxes. Although at the lower income levels of income—$40,000 and $100,000—there is nodifference between the taxes for individuals and those for corporations. However, at the higher level of $500,00, the corporate tax is almost twice the level of the personal tax.

The Interactive Tax Assistant (ITA) is a tool that determines if a type of income is taxable, and whether the individual/corporation is eligible to claim certain credits, or if you can deduct expenses on your tax return. It basically answers a number of tax law queries.