« Daily Howler | Main | Social expenditures compared »
November 16, 2002
Canada's taxes
One of the biggest myths you hear in the Canadian press is the old canard that taxes in Canada are soooo much higher than in the United States. That was said to be the cause of the 1990s "brain drain", and cutting taxes to US levels would magically restore the Canadian economy.
But such analyses were mistaken because they relied only on income taxes. If you add income and payroll taxes, a different picture emerges.
Compare Ontario and California, counting EI and CPP for Ontario, and SS, Medicare, and SDI for California:
Income: 20K
California tax: 3,840
Ontario tax: 3,670
Income: 50K
California tax: 15,160
Ontario tax: 13,650
Income: 100K
California tax: 38,550
Ontario tax: 37,200
The main differentiator between Canada and the US is the GST, which has no American equivalent. Canada's alcohol and gasoline taxes are also higher than the US. On the other hand, oil royalties and capital gains taxes are lower in Canada, which also lacks an estate tax.
Posted by Tyrone at November 16, 2002 04:57 PM