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If so, you likely already well aware of the penalty you suffer due to the progressive nature of our tax system and its graduated rates. In other words, the more you make in a given year, the higher up the graduated rate ladder you climb, resulting in a higher tax bill. Howe Institute entitled Question of Fairness: Time to Reconsider Income Averaging Provisions, takes a deeper look at this issue and attempts to quantify the tax penalty Canadians face on swings in their income from year to year.

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