Final answer:
Dividend Tax Credit (DTC)
The corporate tax credit claimed by Canadian taxpayers against dividend income is the Dividend Tax Credit (DTC). Corporate income tax is a major source of federal revenue and the effective tax rate helps in understanding a corporation's total tax burden.
Step-by-step explanation:
The corporate tax credit that is claimed by a Canadian taxpayer against their dividend income is referred to as the Dividend Tax Credit (DTC). This credit is designed to mitigate the issue of double taxation on dividends that are paid out of the earnings of a corporation that has already paid taxes on its profits. This makes corporate income taxes an integral part of understanding the overall tax burden on corporate profits. As such, the effective tax rate comes into play, which is an average rate that takes into account the tax benefits utilized by the company within a tax year.
It's important for businesses and investors to consider the implications of taxes on profits, such as the corporate income tax, which is a significant source of federal revenue. However, as indicated by historical data, corporate income tax receipts as a share of GDP have decreased from around 4% in the 1960s to roughly 1% to 2% in recent decades.