8.2.6 Summary of key messages
- While the tax principle is that all income is treated the same, many exceptions mean that some forms of income can be taxed at a higher or lower rate, or even be tax-free.
- A graduated income tax system means that people with lower income pay a lower rate of tax than people with a higher income.
- You pay income tax on your taxable income—your total income minus allowable deductions or exemptions.
- You can calculate your average rate of tax, but when you make more income, it will be taxed at your marginal tax rate.
At the end of the module, you will find an Action plan. This is a tool that you can use to track your progress and take the next steps to manage your taxes successfully in the future. Use the action plan as a roadmap for financial action!
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