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"50% marginal tax rate started around $65k" I think your friend has very poor math skills. http://www.ey.com/CA/en/Services/Tax/Tax-Calculators-2012-Personal-

by c1u 14y ago

"50% marginal tax rate started around $65k" I think your friend has very poor math skills. http://www.ey.com/CA/en/Services/Tax/Tax-Calculators-2012-Personal-Tax http://www.ey.com/CA/en/Services/Tax/Tax-Calculators-2012-Pe... $65K gross income in BC nets nearly $52K; a ~20% average tax rate. This is before any eligible deductions. Even if your friend was making $1,000,000 gross salary, they'd still pay less than 42% tax on average, and that's ignoring several legal tax shelters available to all Canadians.

refurb 14y ago
Note, he said "marginal" not "overall" tax rate. Don't forget that BC has 12% sales tax and monthly premiums for health insurance. Income tax is only one of the many taxes.
- run4yourlives 14y ago
  BC has (or rather will return to) a variable sales tax that floats around 7% normally. There is also a 5% GST everywhere in Canada. (Like a VAT) Correct on MSP (Medical Services Plan). Personally, I'd love to abolish this and roll it into general revenues. It's a nightmare.
- c1u 14y ago
  ok, the highest marginal tax rate for a $65K gross salary is ~30%. Everyone gets the first ~10K tax-free, then it's ~20% (in BC) off the next ~$40K, then ~30% off the next ~$40K. Only the last ~$15K gets taxed at 30%, and you can easily reduce that to zero with available legal tax-shelters/deductions/credits. BC health premiums are $65/month for a single person. Sales tax is a consumption tax and not really relevant.
- vacri 14y ago
  Sales tax is not a 'marginal' tax, and is certainly not unique to BC.
  - refurb 14y ago
    No, it's not a marginal tax, I was just referring to the fact that total tax burden has to include more than just income tax.
rdl 14y ago
What are property taxes like? Vancouver real estate is absurdly expensive compared to even SFBA from what I remember (although I was looking at London Properties), so the rate is on a really high base, too. I'd be interested in an objective comparison of SF, Portland, Seattle, and Vancouver from the perspective of a startup and ~10-20 developers making O($100k/yr) each. Maybe throw in Las Vegas or Austin, for the lowest possible US case, and someplace like Calgary for the cheapest Canadian case. Superior Canadian immigration rules would seem to dominate if taxes are even within 50% of each other in some cases (founders or substantial early employees not being willing or able to work in the US), and would also dominate in cases like "gaming", anything privacy/anonymity based where US law was an issue, etc. I'm not sure how Canadian investment rules work (I know there's the weird R&D tax credit, and there were issues until recently with taxing or reporting gains).
- c1u 14y ago
  Renting is the only sane choice in Vancouver right now as most Van RE is extremely overvalued. Median household income in Vancouver is ~$67K, which indicates RE prices are definitely out of whack. Calgary would not be my choice for "cheapest case", I'd place Windsor Ontario (EST) in that slot, although I wouldn't want to live there :P. For a low-cost large city Ottawa Ontario (EST) is quite attractive. Corporate taxes are lower in Canada, but there are other mandatory payroll costs like CPP (9.9% of the first eligible $50k earned split 50/50 between employer/employee) and EI (employer pays 1.4x whatever the employee pays at 1.88% of the first eligible $50K earned).

by c1u 14y ago

refurb 14y ago

Note, he said "marginal" not "overall" tax rate. Don't forget that BC has 12% sales tax and monthly premiums for health insurance. Income tax is only one of the many taxes.

run4yourlives 14y ago
BC has (or rather will return to) a variable sales tax that floats around 7% normally. There is also a 5% GST everywhere in Canada. (Like a VAT) Correct on MSP (Medical Services Plan). Personally, I'd love to abolish this and roll it into general revenues. It's a nightmare.
c1u 14y ago
ok, the highest marginal tax rate for a $65K gross salary is ~30%. Everyone gets the first ~10K tax-free, then it's ~20% (in BC) off the next ~$40K, then ~30% off the next ~$40K. Only the last ~$15K gets taxed at 30%, and you can easily reduce that to zero with available legal tax-shelters/deductions/credits. BC health premiums are $65/month for a single person. Sales tax is a consumption tax and not really relevant.
vacri 14y ago
Sales tax is not a 'marginal' tax, and is certainly not unique to BC.
- refurb 14y ago
  No, it's not a marginal tax, I was just referring to the fact that total tax burden has to include more than just income tax.

rdl 14y ago

What are property taxes like? Vancouver real estate is absurdly expensive compared to even SFBA from what I remember (although I was looking at London Properties), so the rate is on a really high base, too. I'd be interested in an objective comparison of SF, Portland, Seattle, and Vancouver from the perspective of a startup and ~10-20 developers making O($100k/yr) each. Maybe throw in Las Vegas or Austin, for the lowest possible US case, and someplace like Calgary for the cheapest Canadian case. Superior Canadian immigration rules would seem to dominate if taxes are even within 50% of each other in some cases (founders or substantial early employees not being willing or able to work in the US), and would also dominate in cases like "gaming", anything privacy/anonymity based where US law was an issue, etc. I'm not sure how Canadian investment rules work (I know there's the weird R&D tax credit, and there were issues until recently with taxing or reporting gains).

c1u 14y ago
Renting is the only sane choice in Vancouver right now as most Van RE is extremely overvalued. Median household income in Vancouver is ~$67K, which indicates RE prices are definitely out of whack. Calgary would not be my choice for "cheapest case", I'd place Windsor Ontario (EST) in that slot, although I wouldn't want to live there :P. For a low-cost large city Ottawa Ontario (EST) is quite attractive. Corporate taxes are lower in Canada, but there are other mandatory payroll costs like CPP (9.9% of the first eligible $50k earned split 50/50 between employer/employee) and EI (employer pays 1.4x whatever the employee pays at 1.88% of the first eligible $50K earned).