Final answer:
The appropriate provincial/territorial tax rate for an employee's income varies by jurisdiction and is influenced by the area's specific tax laws and rates, which can be proportional, progressive, or regressive.
Step-by-step explanation:
The appropriate provincial/territorial tax rate to apply to an employee's income depends on the jurisdiction in which they reside and work. In the United States, taxes include federal, state, and sometimes local levels. Each level of government has its own tax rates and regulations, with national government relying heavily on the national income tax, which is structured to be progressive. This means that as an individual's income increases, both the absolute amount and the percentage of income paid as tax generally increase. Tax rates vary between different locations because of differences in state and local government policies, the cost of living, and the different sources of revenue that each government relies on.
For individuals, deductions from wages, known as withholding taxes, cover advance payment of income tax and contributions to social security and insurance programs. Employers also pay taxes based on employees' wages to fund social security systems and other insurance programs. It's important to understand whether taxes are proportional, progressive, or regressive, as this can indicate how tax burden shifts with changes in income.