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Anything you save on rent you're spending on income tax. I love living here but for Silicon Valley types who only care about money it's a terrible choice.

jogjayr 6y ago
> Anything you save on rent you're spending on income tax. Have you seen California state tax rates? The SALT deduction limits from the 2018 "tax cut" bill have only made the calculus worse. And anything you save on income tax, you (or your employer) will spend on health insurance. Someone living in California or Ontario will have almost the same effective tax rate (like within 2-3 percentage points) for a given salary.
- dmode 6y ago
  I mentioned in another post that I am a big proponent of moving to Canada, but I have my eyes wide open. Canadian salaries do not even come close. Also, I have filed taxes in CA for 12 straight years. The tax burden gets diluted by a lot of different factors like deductions, mortgage deductions, tax credits etc. In 2018, I took my total $$$ paid to Fed + CA and divided over total income and effective rate was only 28%. The top rate in CA is 9% which is a progressive rate. Effective rate is actually close to a flat 5%
  - bhk 6y ago
    The top rate in California is 13.3%
  - jogjayr 6y ago
    > mortgage deductions, Agreed. This is a huge tax break. > In 2018, I took my total $$$ paid to Fed + CA and divided over total income and effective rate was only 28% Do you mind plugging in the same income to https://simpletax.ca/calculator https://simpletax.ca/calculator for Ontario, use $26500 of RRSP deduction and see your effective rate? In this comment (https://news.ycombinator.com/item?id=23618074 https://news.ycombinator.com/item?id=23618074) I showed that an income with 30% effective rate in California has a 35% effective rate in Ontario. Higher? Yes. A lot higher? IMO, no.
- def8cefe 6y ago
  https://www.theglobeandmail.com/business/commentary/article-high-tax-california-much-more-attractive-to-entrepreneurs-than/ https://www.theglobeandmail.com/business/commentary/article-... Here's an article from Canada's most respected business and finance paper breaking it down. Don't forget that cost of real estate/rent in Toronto or Vancouver is not significantly cheaper than SF, salaries are lower, cost of living expenses (food, car insurance, clothes, electronics, cellphone plans, etc) are higher and you're still going to want to carry supplemental health insurance because OHIP does not cover everything.
  - jogjayr 6y ago
    Marginal tax rates can be misleading, especially because (as the linked article itself states) they apply to different levels of income. Effective tax rates provide a clearer picture. Let's take one example. I plugged in $200k (CAD 270k, admittedly quite high for Ontario) of income to a California[1] and Ontario[2] tax calculator. For California, I used the following: "Filing status - Single, 401k deductions - $19k". Effective tax rate: 30%. For Ontario, I assumed CAD 26.5k in RRSP deductions. Effective tax rate: 35%. > cost of real estate/rent in Toronto or Vancouver is not significantly cheaper than SF Buying isn't cheaper. Renting is still significantly cheaper (at least by 1/3). > salaries are lower This is true. > cost of living expenses...are higher Cellphones and internet, yes. Everything else (yes, even milk and dairy products if you shop at Costco) is comparable to US prices. > you're still going to want to carry supplemental health insurance Most employers provide this. And vision/dental is far cheaper than paying for everything. I'm not saying you'll end up with more money if you live in Canada. I just want to point out that many of the fears of "higher taxes" and "higher CoL" may be a bit overblown. 1. https://smartasset.com/taxes/california-tax-calculator https://smartasset.com/taxes/california-tax-calculator 2. https://simpletax.ca/calculator https://simpletax.ca/calculator
    - def8cefe 6y ago
      Dude I live in Canada lol. 5% of 270k CAD/200k USD is 10k USD. That's not an insignificant amount of money. Sales tax is higher here, 13% in Ontario vs ~7% in CA (varies by county or something weird). Things really are more expensive. Grab any book off your shelf and look at the Canadian and American MSRP, notice how it's still more expensive in Canada after accounting for currency conversion. Gas is more expensive. Alcohol and cigarettes are more expensive. The list goes on and on. Off the top of my head the only things I can think of that I know to be cheaper in Canada are maple syrup, propane and lumber. >Most employers provide this. And vision/dental is far cheaper than paying for everything. Most employers provide it in the states as well, but it's still money they spend on you instead of paying to you. Insurance needs to cover less here, but it is needed for much more than vision and dental. The biggest one I can think of would be prescription medications, there are more but I don't feel like grabbing a policy book off my shelf. >Buying isn't cheaper. Renting is still significantly cheaper (at least by 1/3). I haven't gone into any great detail verifying this but I doubt it is true. What cities and neighbourhoods were you comparing? Again I love my country but moving to a major Canadian city from a major American as a way to save money is a foolish idea.

jogjayr 6y ago

> Anything you save on rent you're spending on income tax. Have you seen California state tax rates? The SALT deduction limits from the 2018 "tax cut" bill have only made the calculus worse. And anything you save on income tax, you (or your employer) will spend on health insurance. Someone living in California or Ontario will have almost the same effective tax rate (like within 2-3 percentage points) for a given salary.

dmode 6y ago
I mentioned in another post that I am a big proponent of moving to Canada, but I have my eyes wide open. Canadian salaries do not even come close. Also, I have filed taxes in CA for 12 straight years. The tax burden gets diluted by a lot of different factors like deductions, mortgage deductions, tax credits etc. In 2018, I took my total $$$ paid to Fed + CA and divided over total income and effective rate was only 28%. The top rate in CA is 9% which is a progressive rate. Effective rate is actually close to a flat 5%
- bhk 6y ago
  The top rate in California is 13.3%
- jogjayr 6y ago
  > mortgage deductions, Agreed. This is a huge tax break. > In 2018, I took my total $$$ paid to Fed + CA and divided over total income and effective rate was only 28% Do you mind plugging in the same income to https://simpletax.ca/calculator https://simpletax.ca/calculator for Ontario, use $26500 of RRSP deduction and see your effective rate? In this comment (https://news.ycombinator.com/item?id=23618074 https://news.ycombinator.com/item?id=23618074) I showed that an income with 30% effective rate in California has a 35% effective rate in Ontario. Higher? Yes. A lot higher? IMO, no.
def8cefe 6y ago
https://www.theglobeandmail.com/business/commentary/article-high-tax-california-much-more-attractive-to-entrepreneurs-than/ https://www.theglobeandmail.com/business/commentary/article-... Here's an article from Canada's most respected business and finance paper breaking it down. Don't forget that cost of real estate/rent in Toronto or Vancouver is not significantly cheaper than SF, salaries are lower, cost of living expenses (food, car insurance, clothes, electronics, cellphone plans, etc) are higher and you're still going to want to carry supplemental health insurance because OHIP does not cover everything.
- jogjayr 6y ago
  Marginal tax rates can be misleading, especially because (as the linked article itself states) they apply to different levels of income. Effective tax rates provide a clearer picture. Let's take one example. I plugged in $200k (CAD 270k, admittedly quite high for Ontario) of income to a California[1] and Ontario[2] tax calculator. For California, I used the following: "Filing status - Single, 401k deductions - $19k". Effective tax rate: 30%. For Ontario, I assumed CAD 26.5k in RRSP deductions. Effective tax rate: 35%. > cost of real estate/rent in Toronto or Vancouver is not significantly cheaper than SF Buying isn't cheaper. Renting is still significantly cheaper (at least by 1/3). > salaries are lower This is true. > cost of living expenses...are higher Cellphones and internet, yes. Everything else (yes, even milk and dairy products if you shop at Costco) is comparable to US prices. > you're still going to want to carry supplemental health insurance Most employers provide this. And vision/dental is far cheaper than paying for everything. I'm not saying you'll end up with more money if you live in Canada. I just want to point out that many of the fears of "higher taxes" and "higher CoL" may be a bit overblown. 1. https://smartasset.com/taxes/california-tax-calculator https://smartasset.com/taxes/california-tax-calculator 2. https://simpletax.ca/calculator https://simpletax.ca/calculator
  - def8cefe 6y ago
    Dude I live in Canada lol. 5% of 270k CAD/200k USD is 10k USD. That's not an insignificant amount of money. Sales tax is higher here, 13% in Ontario vs ~7% in CA (varies by county or something weird). Things really are more expensive. Grab any book off your shelf and look at the Canadian and American MSRP, notice how it's still more expensive in Canada after accounting for currency conversion. Gas is more expensive. Alcohol and cigarettes are more expensive. The list goes on and on. Off the top of my head the only things I can think of that I know to be cheaper in Canada are maple syrup, propane and lumber. >Most employers provide this. And vision/dental is far cheaper than paying for everything. Most employers provide it in the states as well, but it's still money they spend on you instead of paying to you. Insurance needs to cover less here, but it is needed for much more than vision and dental. The biggest one I can think of would be prescription medications, there are more but I don't feel like grabbing a policy book off my shelf. >Buying isn't cheaper. Renting is still significantly cheaper (at least by 1/3). I haven't gone into any great detail verifying this but I doubt it is true. What cities and neighbourhoods were you comparing? Again I love my country but moving to a major Canadian city from a major American as a way to save money is a foolish idea.