Baby, we got a bubble!?

[brockm]

It is your rignt to decide where you want to live but not all areas of the US have affordable housing - some desirable areas are much more expensive or as expensive as Toronto. Yes mortage interest is deductible but its very bad from a tax policy perspective and arguably played some role in contributing to the real estate bubble there and you are taxed when you sell your house (there is exemption of $250,000 if you are filing single, I believe; $500,000 if you file jointly and are married) but any gain about that exemption is subject to tax. I don't disagree with you that we have long term issues concerning growth and affordability in Toronto but real estate bubbles can happen anywhere given the right conditions - no country is immune. My only other comment is don't get sick in the US. A serious illness can be castrophic financially even if you do have insurance and insurance can be quite expensive.. I know our public health system is far from perfect but I would take it any day over the US system.

Nah. Toronto is more expensive than the US. You can't just factor in real estate prices. There's other angles to cost of living.

My wife and I are thinking of moving out of Canada right now -- I make six-figures, and my company is willing to relocate me to the US. At the same salary, in even the high tax state of California, my tax bill will drop by almost $20k, the cost of food will be halved, the cost of consumer goods will drop by like anywhere from 15% to 40% depending on things, electricity will be cheaper, etc.

Admittedly, I am a high income earner, which explains the giant gap in tax bill. But as someone who used to live in the US, I definitely feel the pinch here.

My monthly rent, in say, San Francisco could be like 30% higher than it is in Toronto, and I'd STILL come out ahead by a huge margin when all the other factors are accounted for. Canada is a really f#!4ing expensive place to live, relative to the US.

We love Toronto and want to stay. But we also want to live downtown, not drive and bring our kids up in an urban environment. But even at my income level, it's really quite insane how much money I hand over to the government when all is said and done.

If you include sales tax on bills and other goods we pay every year, I hand over more than 50% of my income to the government any year. And I think that's kind of obscene. And yes my tax bill came in a smidgen over $100k last year. And the way the political winds are blowing, there's a lot of people who think people in my income bracket should pay even more.

I'd rather pay the American left's version of higher taxes than the Canadian left's version of higher taxes, that's for sure.

 

[daveto]

Agreed. Expensive, inefficient and uncompetitive. As an example, our telecommunications rates criminal compared with the rest of the developed world.

My pet peeve is the inadequate level of RRSP room. The US allows $50k, the UK $65k (40k pounds), etc. But there's Canada at $22k, (and linked to salary, unlike the others). Plus the marginal tax rate much higher in Canada (47% vs 36%/40% for the US/UK).

Canada is the best deal for those at middle of the salary pack. The top earners/(producers) get the short end of the stick here.

But, fortunately, Canada is gifted with natural resources, and prime and secure access to the world's most profitable marketplace.

 

[brockm]

Agreed. Expensive, inefficient and uncompetitive. As an example, our telecommunications rates criminal compared with the rest of the developed world.

My pet peeve is the inadequate level of RRSP room. The US allows $50k, the UK $65k (40k pounds), etc. But there's Canada at $22k, (and linked to salary, unlike the others). Plus the marginal tax rate much higher in Canada (47% vs 36%/40% for the US/UK).

Canada is the best deal for those at middle of the salary pack. The top earners/(producers) get the short end of the stick here.

But, fortunately, Canada is gifted with natural resources, and prime and secure access to the world's most profitable marketplace.

It's also the people in my income bracket who are the most mobile. If I was making $500k/year, I probably wouldn't care. Higher taxes, whatever. I'm in that area of income where I make enough, have a large enough family, want to live downtown and feel strained to save money. Which sounds crazy, but it's true. Daycare ... boom.. $1600/month. For each kid. You live downtown, without a backyard, you got to have your kids have something to do... boom $300-$500/month for kids activities. Groceries in the city for a family of four... easily another $1000/month -- assuming you want to eat healthy.

Yes, Toronto is *really* that expensive, if you're supporting a family... where having a high-income can turn into a struggle to save money.

It's not like we live the high life. With kids, we never get to go out to dinner. Maybe one our two date nights a month, if we're lucky and we can find a sitter.

When you run the numbers, for someone in my income bracket, the US looks mighty attractive.

 

[interested]

^^^
US comparison to Toronto or Canada for that matter is very simple. If you make a 6 figure salary, and especially if you are employed where you have good medical coverage (critical), then you are better off in the US. However, our public school system while not great is better than a lot of US states. University is extremely expensive when comparing later on. Property taxes are higher in the US. Still, I agree you end up better off in the US.

If you are middle class, with incomes from $50-$100K, the math doesn't work. In fact, I would say probably even up to $125K there is not much benefit. Beyond $150K, definitely better off financially in the US
I think it depends at what stage you are at. In retirement, definitely much better in the US.

The other issue for people who think of moving is: where is family? It is great to make some more money and have some extra left over but that does not buy a lack of support system.

Still the US is attractive, no doubt. You are right BrockM. San Fran would be at least 30% and probably closer to 50% higher for the same as Toronto based on what I have been told.

 

[brockm]

What makes me absolutely nuts is when I hear from people that those in my income bracket aren't paying their fare share. Because more than 50% isn't enough.

 

[interested]

I don't agree with those people who say that either.

On the other hand, if you are paying 50%, it is because you are in the privileged 1% or so of the population. I am not saying you are not worth it or earning it justifiably. I am just suggesting that rather you should consider yourself lucky to be in that position.

I recall a wise person once told me not to complain about paying so much taxes. At least you are making the income to pay it.
That said, government waste and stupidity does make it difficult to endure.

 

[bleu]

I don't agree with those people who say that either.

On the other hand, if you are paying 50%, it is because you are in the privileged 1% or so of the population. I am not saying you are not worth it or earning it justifiably. I am just suggesting that rather you should consider yourself lucky to be in that position.

I recall a wise person once told me not to complain about paying so much taxes. At least you are making the income to pay it.
That said, government waste and stupidity does make it difficult to endure.

however, that rests on the assumption that the government won't squander tax money.
in reality, the government always do. it is its specialty. Look at the sunshine list, as well as so many wasteful "programs", we should know paying a lot of tax is not such a satisfying thing and the money seldom goes to where it is supposed to.

 

[Kenny]

Canada is the best deal for those at middle of the salary pack. The top earners/(producers) get the short end of the stick here.

Not necessarily?

http://slumbuddy.wordpress.com/2011/03/20/comparison-of-us-and-canadian-tax-rates-for-2010/

Maximum federal income tax rate in Canada: 29%
Maximum federal income tax rate in US (single): 35% going up to 39.6%

Maximum capital gains rate in Canada: 14.5% (half of capital gains is taxable as regular income, the other half is tax free)
Maximum long term capital gains rate in US: 15% going up to 20%
Maximum short term capital gains rate in US: same as income

Maximum estate tax in Canada: 0%
Maximum estate tax in US: 35% perhaps going back up to 50%

I'm not sure how accurate these numbers are or if they've changed since 2010...

 

[cdr108]

^ ^ ^
you would need to look at provincial and state income taxes to get an accurate rate.

 

[Kenny]

^ ^ ^
you would need to look at provincial and state income taxes to get an accurate rate.

Provinces are on average about ~5% more than States:

http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html
http://taxes.about.com/od/statetaxes/a/highest-state-income-tax-rates.htm

So, overall, it's possible that you might pay lower taxes in a Province than a State.

 

[marsh]

Some US cities have income taxes. I think New York City does. In certain high US tax states, when you combine the federal, state and city taxes you may get close to the top marginal combined Federal/Provincial income tax rates. However, the top federal income tax rate in Canada kicks in on much lower income than the US top marginal federal income tax rate. Also, state income taxes are deductible on your US federal tax return. We don't get to deduct the payment of our provincial taxes against our federal income tax due. So, overall, I think that you will likely pay less income tax living in the US. However, there are many reasons for moving - for some people tax is important, but its not necesssarily the only reason. Anyways, I think this is getting a little off topic.

 

[urbandreamer]

Does anyone recall my post regarding this thread is about the "1% talking to the 5% with the 10% following and the 90% clueless"?

I am in neither the 1% nor the 5% yet I called this bubble correctly! It's burst.

 

[Riverdale Rink Rat]

However, our public school system while not great is better than a lot of US states.

Emphasis mine. Leaving off the other tradeoffs of living in the US versus Toronto (or Canada in general), and for anyone with an even potentially precarious job situation the medical situation is way, way more expensive and complicated than folks here are making out, the public school system is one of the top reasons to continue to live in Canada (believe it or not, interested.) Canada consistently ranks in the top 5 worldwide on standardized tests for 15 year olds. (for nitpickers, the 2009 scores skew Canada down as China cherry-picked classes to take the exam.)

http://en.wikipedia.org/wiki/Programme_for_International_Student_Assessment

I went to school in the US and my brother lives in San Francisco, and there are many pluses to living in the US. But to say that you can live 30-50% 'better' on the same salary is missing so many factors as to be a nonsensical assertion.

 

[cdr108]

Emphasis mine. Leaving off the other tradeoffs of living in the US versus Toronto (or Canada in general), and for anyone with an even potentially precarious job situation the medical situation is way, way more expensive and complicated than folks here are making out, the public school system is one of the top reasons to continue to live in Canada (believe it or not, interested.) Canada consistently ranks in the top 5 worldwide on standardized tests for 15 year olds. (for nitpickers, the 2009 scores skew Canada down as China cherry-picked classes to take the exam.)

http://en.wikipedia.org/wiki/Programme_for_International_Student_Assessment

I went to school in the US and my brother lives in San Francisco, and there are some many pluses to living in the US. But to say that you can live 30-50% 'better' on the same salary is missing so many factors as to be a nonsensical assertion.

this reminds me of an episode of Oprah i saw many years ago.
they were talking about the public school system in the US and how bad it was.
many middle-income families had to enroll their children into private school for a better education and to get away from the violence (perceived or real) etc.

this one black girl stood up and talked to Oprah, and she didn't speak with slang/ebonics.
Oprah asked her what private school she attended, and the girl replied that she goes to a public school in Canada.

 

[CN Tower]

Provinces are on average about ~5% more than States:

http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html
http://taxes.about.com/od/statetaxes/a/highest-state-income-tax-rates.htm

So, overall, it's possible that you might pay lower taxes in a Province than a State.

I am no fan or supporter of the current provincial government, however it is a fact that Ontario has the lowest corporate tax rate of any jurisdiction in North America. I find that a compelling factor for business to locate here.