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The Canadian figures seem insanely low. 11.5% total? When I lived in BC making an approximately average income, my effective tax rate alone was 21% [EDIT: origi

The Canadian figures seem insanely low. 11.5% total? When I lived in BC making an approximately average income, my effective tax rate alone was 21% [EDIT: originally put 23%]. I paid pension, health insurance, and unemployment deductions on top of that. And that only counts the employee side of deductions. This example is "married with two kids", so it's possible that there are massive offsets that I didn't have access to as a single person, but 11.5% still seems very low. I would expect Canada to fare favourably in this comparison, though. The taxes are not as bad as most Americans think. Although they do ramp up very quickly for higher earners, which was an incentive for moving to the states as my income increased. Also, pay is higher in the US (by a factor of about 2 or 3) for the same job.

ylbss 8y ago
Maybe federal tax, but that starts at 15%. I mean when they say effective maybe they're talking about the average people pay after deductions? Who knows, 11% still seems incorrect.
- UnFleshedOne 8y ago
  There is a base income level not taxed at all (~12k CAD), after that it is up from 15% + province tax.
MichaelBurjack 8y ago
You might have a skewed sense of what median Canadian income is. And your job might be further above that median than you realize. Median Canadian individual income is ~$35,000 [0]. In B.C., your average 2019 tax rate would be 13.34% not including non-refundable tax credits (and so the effective rate would likely be a point or two lower). [1] A median tax rate of 11.5% against a median Canadian individual income seems entirely reasonable. ---- 0: https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110023901 https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=111002... 1: https://www.ey.com/ca/en/services/tax/tax-calculators-2019-personal-tax https://www.ey.com/ca/en/services/tax/tax-calculators-2019-p...
- deleted 8y ago
  [deleted]
- titanomachy 8y ago
  It seems you're right. I know I was close to the average for my region, but that's a high cost-of-living city with a much higher median income than 35k. I may have also been conflating household and individual income. Lessons: 1) I have no concept of the median experience in my country, 2) a single number can't answer the question "does this country have high taxes".
  - MichaelBurjack 8y ago
    Truthfully, the only reason I had the numbers at hand was because I'd personally fallen for your "Lesson #1" before. I spent my 20s far below median (which I knew), and my 30s far above median (which I didn't realize, at least not at first). Very different lived experiences :) And I know many folks around me (friends, family, colleagues) look around (confirmation bias & availability heuristic, amongst others) and believe that $60k-$80k (or more) represents a "typical" lived Canadian experience. They are, to a person, universally surprised to see the actual median income (as was I when first tracking it down). It certainly is viewpoint-shifting. Cheers!
- bzbarsky 8y ago
  That 35000 number includes retirees (though I don't know to what extent retirements are income-funded in Canada) and kids still in high school and college (and possibly post-graduate education). The median income for 45-54 year olds from that site seems to be $49,100. Median for 35-44 is 48,000. It's not $60-80k as you say below, but not $35k either. One other interesting note is that there is a pretty big difference by gender. Median income for _males_ 35-44 is $56,300 while females are at $41,400. For 45-54 year olds those numbers are $58,000 and $42,400 respectively. Those differences are big enough that I wonder whether this is being affected by the relative incidence of part-time vs full-time work. The statistics here seem to be looking at people with any income at all (including investment income), not "salaries"... Depending on the demographics of the people you talk to (full-time jobs, 35-55 years old, maybe toss in "male"), $60k is not an unreasonable thing for them to feel a "typical" experience is. I agree that people with educations and in "good" jobs tend to over-estimate the median income, but I also think that once you account for lifecycle effects the median income of what people think of as a "typical worker" (which is not a 17-year old nor a 70-year old) is higher than the summary statistics suggest. And of course the thing that can really hurt is if you can't find full-time work at all....
viburnum 8y ago
Is this a Canadian federalism thing? Are social payments pronvincial instead of federal?
- refurb 8y ago
  For healthcare at least, the federal govt gives grants that cover some of the cost. The provinces are expected to pay the rest.

ylbss 8y ago

Maybe federal tax, but that starts at 15%. I mean when they say effective maybe they're talking about the average people pay after deductions? Who knows, 11% still seems incorrect.

UnFleshedOne 8y ago
There is a base income level not taxed at all (~12k CAD), after that it is up from 15% + province tax.

MichaelBurjack 8y ago

You might have a skewed sense of what median Canadian income is. And your job might be further above that median than you realize. Median Canadian individual income is ~$35,000 [0]. In B.C., your average 2019 tax rate would be 13.34% not including non-refundable tax credits (and so the effective rate would likely be a point or two lower). [1] A median tax rate of 11.5% against a median Canadian individual income seems entirely reasonable. ---- 0: https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110023901 https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=111002... 1: https://www.ey.com/ca/en/services/tax/tax-calculators-2019-personal-tax https://www.ey.com/ca/en/services/tax/tax-calculators-2019-p...

deleted 8y ago
[deleted]
titanomachy 8y ago
It seems you're right. I know I was close to the average for my region, but that's a high cost-of-living city with a much higher median income than 35k. I may have also been conflating household and individual income. Lessons: 1) I have no concept of the median experience in my country, 2) a single number can't answer the question "does this country have high taxes".
- MichaelBurjack 8y ago
  Truthfully, the only reason I had the numbers at hand was because I'd personally fallen for your "Lesson #1" before. I spent my 20s far below median (which I knew), and my 30s far above median (which I didn't realize, at least not at first). Very different lived experiences :) And I know many folks around me (friends, family, colleagues) look around (confirmation bias & availability heuristic, amongst others) and believe that $60k-$80k (or more) represents a "typical" lived Canadian experience. They are, to a person, universally surprised to see the actual median income (as was I when first tracking it down). It certainly is viewpoint-shifting. Cheers!
bzbarsky 8y ago
That 35000 number includes retirees (though I don't know to what extent retirements are income-funded in Canada) and kids still in high school and college (and possibly post-graduate education). The median income for 45-54 year olds from that site seems to be $49,100. Median for 35-44 is 48,000. It's not $60-80k as you say below, but not $35k either. One other interesting note is that there is a pretty big difference by gender. Median income for _males_ 35-44 is $56,300 while females are at $41,400. For 45-54 year olds those numbers are $58,000 and $42,400 respectively. Those differences are big enough that I wonder whether this is being affected by the relative incidence of part-time vs full-time work. The statistics here seem to be looking at people with any income at all (including investment income), not "salaries"... Depending on the demographics of the people you talk to (full-time jobs, 35-55 years old, maybe toss in "male"), $60k is not an unreasonable thing for them to feel a "typical" experience is. I agree that people with educations and in "good" jobs tend to over-estimate the median income, but I also think that once you account for lifecycle effects the median income of what people think of as a "typical worker" (which is not a 17-year old nor a 70-year old) is higher than the summary statistics suggest. And of course the thing that can really hurt is if you can't find full-time work at all....

viburnum 8y ago

Is this a Canadian federalism thing? Are social payments pronvincial instead of federal?

refurb 8y ago
For healthcare at least, the federal govt gives grants that cover some of the cost. The provinces are expected to pay the rest.