Give families, seniors a tax break - Published Thursday April 29th, 2010

 It's that time of year when most people want to know - at least when it comes to income tax - whether they owe the government or the government owes them.

Next, consider an unmarried senior with income of $20,000. Assuming $13,000 of government pension income and $7,000 of private investment income, his tax bill is $459, or 2.3 per cent of total income.

Had he drawn an additional $5,000 of investment income, his tax bill increases to $1,891, meaning that 28.6 per cent of the additional investment income is taxed. This claw back of investment income can act as a disincentive to save for retirement.