Capital gains are taxed at a lower rate than ordinary income such as salary and wages. Currently the top rate on most capital gains is 15% while the top rate on salary and wages is 35%, according to a research report by the Center on Budget and Policy Priorities. In addition taxes on capital gains are due only when the gains are realized and hence they can be postponed as long as necessary. But this is not possible with ordinary income since taxes are paid when income is earned.

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From the report:

Capital gains on assets that have been held for more than one year are generally taxed at a substantially reduced rate when the gain is realized: currently a 15 percent tax rate for taxpayers in an income tax bracket above the 15 percent bracket. (People in or below the 15 percent bracket owe no capital gains tax.) This is far below the top marginal tax rate on ordinary income — currently 35 percent — and is the lowest rate on long-term capital gains since the Great Depression. (See Figure 10.)

Source:  Raising Today’s Low Capital Gains Tax Rates Could Promote Economic Efficiency and Fairness, While Helping Reduce Deficits by Chye-Ching Huang and Chuck Marr, Center on Budget and Policy Priorities

Canada has the most competitive corporate tax rate now among the G-7 countries. The marginal effective tax rate in Canada at 19.9% is now the lowest among the G-7 countries and the 20th most tax-competitive in the 34-member OECD, according to a research report by Duanjie Chen and Jack Mintz of The School of Public Policy, University of Calgary, Canada.

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Source:

2012 Annual global Tax Competitive  Ranking – A Canadian Good News Story

Duanjie Chen and Jack Mintz of The School of Public Policy, University of Calgary, Canada

The authors note that in addition to Canada, Japan and the UK reduced the marginal effective tax rates in 2012 as part of the pro-growth agenda. The U.S. has the highest tax rate at 35.6% which is much higher than the OECD average of 19.4%.