Why does Canadian public policy discourage saving?
A) because, other things the same, taxes increase the return from savings
B) because means-tested programs such as Old Age Security provide greater benefits to those who saved
C) because some forms of capital income are taxed twice
D) because capital gains are not taxed

Question

Quizplus · Accepted Answer

Canadian public policy discourages saving because some forms of capital income, such as dividends and interest, are subject to double taxation (both at the corporate and personal level) which reduces the net return from savings. This discourages individuals from saving because their after-tax return is diminished.

Why Does Canadian Public Policy Discourage Saving