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VAT Rises to 20%


KFRCanuk
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Very few Canadians have a right to complain about our tax system, especially if you are a small business owner. I have done my taxes by the book since moving here 11 years ago and have paid about half the rate I would have paid had I stayed in the US/UK, where ease of doing business is on par with Canada. That includes income and property taxes. Few appreciate how good we have it.

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How social services are handled is certainly different (healthcare, school taxes, etc.), but what I hear fellow Canadians complain about most is income tax (compared to low-tax U.S. states), and lack of the U.S. tax incentives related to housing (interest on mortgages tax deductible). 

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How social services are handled is certainly different (healthcare, school taxes, etc.), but what I hear fellow Canadians complain about most is income tax (compared to low-tax U.S. states), and lack of the U.S. tax incentives related to housing (interest on mortgages tax deductible).  

 

One of my Canadian friends moved from British Columbia to Oregon for a promotion and a raise. His new salary was higher even when you ignored exchange rates.  However, he told me that even with a higher salary, his take home pay was lower in Oregon than it was while he was in Canada. (Oregon does have the benefit of no state sales tax though)

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I live in Montreal a 50k single person salary without deduction is about 38% tax rate. A lot lower is you take advantage of all deductions tough.

 

BeerBaron

 

This is the marginal tax rate at 50K.  A much more representative figure would be the total % tax paid. If you go to Taxtips.ca you can see that someone earning 50K in Quebec, pays a total of $11,759 federal and provincial tax.  When you add in the mandatory govt pension and Employment insurance taxes then the total is $14,703.  This makes total tax paid only 29.4% of income (ignoring impact of sales tax/VAT)

 

In BC, that same 50K salary would only be taxed a total of $11,091  for a total tax, pension, and EI tax of only 22.2% of income.

http://taxtips.ca/calculators/taxcalculator.htm

 

Can anyone add detail on how that compares to various states in the US?

 

 

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I live in Montreal a 50k single person salary without deduction is about 38% tax rate. A lot lower is you take advantage of all deductions tough.

 

BeerBaron

 

This is the marginal tax rate at 50K.   A much more representative figure would be the total % tax paid. If you go to Taxtips.ca you can see that someone earning 50K in Quebec, pays a total of $11,759 federal and provincial tax.  When you add in the mandatory govt pension and Employment insurance taxes then the total is $14,703.   This makes total tax paid only 29.4% of income (ignoring impact of sales tax/VAT)

 

In BC, that same 50K salary would only be taxed a total of $11,091  for a total tax, pension, and EI tax of only 22.2% of income.

http://taxtips.ca/calculators/taxcalculator.htm

 

Can anyone add detail on how that compares to various states in the US?

 

 

 

A single person earning $50k in the US pays $8,688 in federal tax -- 17.376%.  There is an additional 15.3% tax that covers social security and medicare programs -- 1/2 of that tax is paid by the employer.  One might be tempted to say that the combined tax is 32.676%, but the employer takes a deduction for 1/2 of that social security and medicare tax... So total tax paid probably comes to roughly 30% or so.

 

Here in Washington state, there is no state income tax (we have property and sales taxes).  Most states have income taxes.

 

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