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Re: Canadian Tax structure (was Obama-Care: This Is What It Will Be Like)

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For those who would like the real information:

In Canada, we have a "progressive tax rate. Make more money, pay
increasingly higher marginal taxes. Personal income tax rate is different in
each province since the provincial rates are layered on the Federal rates
and collected by the Federal gov't on one tax submission. Some Provinces
have additional surtaxes that are targeted to programs such as health care.

It should be noted that if you look at the TOTAL tax structure between US
and Canada, the effects are not very different on the individual. On a case
by case basis any family may be paying more "taxes" depending on their
jurisdiction (e.g. Cities in Canada cannot levy employment taxes).

Some forms of income are only taxed as a partial contribution to your
taxable income (e.g. make $1, only add $0.50 to your TAXABLE income). So the
actual marginal tax rates can be deceptive.

Marginal tax rates in Ontario (2008) for an individual (Combined Federal and
Provincial before surtaxes or rebate credits):
On the first $38,000 of TAXABLE income; 21% (say $50,000 employee gross pay)
on the portion over $38,000 but less than $76,000; 31%
on the portion over $76,000 but less than $124,000; 37%
on the portion over $124,000; 38%
This has been incredibly simplified for presentation. Effects of currency
exchange and income variances (e.g. buying power) have not been considered
for useful comparison to US based wage earners.

Spouses (religious, civil, common-law, or simply living as a Family unit)
have some income portability between higher and lower wage earners. So the
marginal tax rates can be even more deceptive at the family level.
Simplistically, the marginal rates for an individual making $100,000 (as
above) may be higher than the marginal rates for a 2 income Family making

My experience:
Comparing the cost of living in disposable income after ALL effects of ALL
taxes, purchasing services not supplied by Government and retained income
purchasing power, I found that the cost of living in one US jurisdiction was
almost penny for penny the same as in the Toronto area of Southern Ontario.
One of the biggest influences was the higher cost of food partly due to
sales taxes on basic groceries in the US stores in that state. YMMV.

I have seen similar results from studies for small business, primarily
considering Ontario vs New York state. I have not seen studies including the
Cayman Islands but I am aware of certain financial and non-financial
benefits of such a situation.


Paul Ransom, P.Eng.
ph 905 639-9628
fax 905 639-3866

> From: Bill Polhemus <bill(--nospam--at)>

> Remember those are only Canadian FEDERAL taxes. My understanding that
> Provincial and local taxes are also typically higher than their US
> counterparts.
> William L. Polhemus, Jr. P.E.
> Via iPhone 3G
> On Jul 14, 2009, at 12:02 PM, Mark Johnson <markajohn(--nospam--at)> wrote:
>> in Canada
>> Single-Parent Household with $35,000 total income paid 59.6% total
>> taxes
>> Two-Parent Household with $65,000 total income paid 47.7% total taxes
>> in the US
>> Single Parent Household with $35,000 total income paid 31.25% total
>> taxes
>> Two-Parent Household with $65,000 total income paid 34.55% total taxes

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