Tax brackets are income ranges that determine the rate of income tax applied, creating a progressive tax system where higher incomes are taxed at higher rates. Canada uses marginal tax brackets—each bracket's rate applies only to income within that range, not total income. For example, the first portion of income might be taxed at 15%, the next portion at 20.5%, and so on. Both federal and provincial governments have their own bracket structures that combine to determine total income tax. Understanding brackets helps with tax planning. Municipal governments do not have income tax authority, but residents' tax brackets affect their capacity to pay property taxes and inform policy discussions about tax fairness and affordability.