Joyful, I know it is early in the morning and I am not quite awake yet but I don't understand what you are saying. I am living on a provincial pension income of a LOT less than $46,345.00 and they take out taxes at the source. I also have taxes taken from my CPP income. So my income is definitely not "tax-free".

I am definitely not a friend, rich or otherwise, of the Harper Reform-in-Conservative-Clothing Party.

Joyful, I am not sure what you are saying too. I live in the Province of Ontario and I can tell you I pay taxes on a lot less income than $46,000.

But, I would be willing to know how people do it, I am all for not paying taxes on my income. Doubt that will ever happen.

Yoo hoo, Joyful!!

Like I said - rich folks.

With only one kind of income.

They own quite a few Canadian stocks.

Suppose the stocks pay them an income of $46,000.

Suppose, now that the prices of bank shares have gone down quite a lot recently, they have about $660,000. invested that are paying 7%, to produce $46,200. last year.

[Caution: I would not want to see someone with a substantial amount invested have chosen to invest it all in one company - way too risky!]

When the single person calculates his/her tax load ... it'll be zero.

If the "taxpayer" has a low-income spouse with some tax credits to transfer ... or makes some political contributions ... or donates some to a registered charity (and the credit is at a high rate when one contributes over $200. per year) ... or pays upwards of 5% of net income in eligible medical/dental expenses ... the tax-free amount goes even higher.

You may have heard me say in some of my posts that I don't like earning interest - the number of underlying invested dollars can't grow.

And the only income that it produces ... is produced now ... and it's taxed now ... at top rate.

If you have stocks of Canadian companies that pay dividends and have other kinds of income, the tax-free amount reduces rather rapidly ... but you'll pay tax on the dividend portion at a much lower rate than that on most other kinds of income.

If this doesn't explain it adequately, ask and I'll try again.

Perhaps if you check the link and read carefully, you'll find it explained a little differently and in a way that'll be clear to you, over there.

ole joyful

I put the main thread over on the "Retirement" forum and, as the manager didn't used to like us putting identical messages on different forums, but that forum is quite slow and I thought that some of the large number of visitors here might like to see it, to check further to find whether it might be of use to them, I made a brief introduction here and provided a link.

The chief reason for putting the main message over on the "Retirement" forum was that some Canadians who had been used to earning employment income would likely have been aware of the earlier tax advantage when earning Canadian dividends, and of the recent increase of that advantage and they might have done some planning relative to their income and tax situation following retirement, but might have been totally unaware of the greatly increased tax advantage that earning no income but dividends on Canadian stocks would produce, in the absence of income from another source.

If someone especially about 55, or at 60 who'd been thinking that they'd like to retire but thought that they'd have to sell too many assets, each year before retirement age, in order to produce adequate income to live on were to learn that they might be able to arrange to have $46,000. income and avoid paying income tax entirely, they might decide that their annual projected income would then be sufficient for their needs ... so they could retire then, after all.

Learning how money ... and tax ... work: a great hobby, that pays well.

ole joyful