The middle class and the small businesses in Canada carry a really harsh tax burden. There is just no comparison with the kind of tax rates I, as a college professor, pay here in the US and what a person in Quebec with a similar level of income has to shell out. Of course, having access to the really excellent Canadian healthcare system for free is a great benefit that people get in return for their taxes. This is undoubtedly so, and there is nothing to argue here about.
However, if we are talking about young professionals, these are people who don’t really need (for the most part) any ultra-expensive medical services. I’ve had many conversations with younger Canadians defending the healthcare system of Canada from their criticisms. (I’m a huge, huge fan of that system, in case you don’t know). A young person who pays a humongous sum in taxes finds it difficult to be convinced that it will all make sense once he or she is 60 and in need of an expensive operation. Once again, working more and harder to bring your salary from one level to the next makes no immediate practical sense to people, since the salary increase will immediately push them into an even more highly taxed income bracket.
To give an example, my younger sister pays more in taxes per year than what I make in a year. She sees no return on those taxes because she has a private health insurance and no other welfare benefits are extended to her. She says she’d be much happier paying these taxes if she knew that they went directly to provide some professor’s salary. Sadly, this isn’t how it works.
So here you have a situation where quite a few people are discouraged from working at all. Many more realize that starting a business is too much trouble, and who needs the constant aggravation from the Ministry of Revenue? The Canadian tax people never persecute the large corporations, of course. They just choose some poor schmuck trying to run a small Mom and Pop business and squeeze him until he hands over everything he has and declares bankruptcy. They actually tell that to you face when you beg them to see reason and not fine you for an amount you simply do not possess.
Once again, please don’t dispute this point with me because I just finished talking on the phone with precisely this kind of poor Canadian schmuck who is going through this type of torture right now, and I’m understandably upset.
(To be continued. . .)
Clarissa's Blog 
Just looked at my tax forms (Quebec). Without going into details, for income slightly over 80K, I paid ~13% of Federal tax and ~12.5% of Quebec tax. (More precise calculations are pointless as federal government and Quebec allow different deductions and therefore net income is somewhat different.) And that was not claiming ANY credits either one of the spouses can claim (child credit, medical expenses credit – deduce your private medical insurance premiums, tuition credit, etc), and making my wife claim them ALL. So I guess I would reasonably well approximate your hypothetical “young professional”.
It is more than in the States, but not drastically more.
And then I paid ~100/month for private (family) medical insurance because with only the government one you have to wait forever for the simplest things, unless you are really dieing…
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Just looked at my tax forms (Quebec). Without going into details, for income slightly over 80K, I paid ~13% of Federal tax and ~12.5% of Quebec tax. (More precise calculations are pointless as federal government and Quebec allow different deductions and therefore net income is somewhat different.) And that was not claiming ANY credits either one of the spouses can claim (child credit, medical expenses credit – deduce your private medical insurance premiums, tuition credit, etc), and making my wife claim them ALL. So I guess I would reasonably well approximate your hypothetical “young professional”.
It is more than in the States, but not drastically more.
And then I paid ~100/month for private (family) medical insurance because with only the government one you have to wait forever for the simplest things, unless you are really dieing…
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So that comes to 25.5% altogether before the credits? A person who gets $85K in the US pays 11-12% altogether in taxes. At least in two states that I’m aware of how the procedure is.
Child tax credit. What an atrocity. Remember the tax on the childless people in the Soviet Union?
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Are you sure about that 11-12% figure? I think $85K is in the 15% bracket. That’s for Federal taxes. Then there’s state, and city, and property. In New Orleans there was even property tax on cars, there may still be. Also sales tax can be pretty hefty, depending where you are.
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This was in the year of something called “making work pay” program, or something like that. And the entire amount of the tax after all adjustments and what not was as I said.
I was very surprised because my income was almost twice smaller, and the tax percentage was only 1% lower.
Sales tax on everything in Quebec is 15%. Municipal taxes are a whole other thing that I didn’t even begin to mention. All tax information here is on Quebec. I’, unaware of other provinces but, of course, it’s lower.
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If I’d paid only 11-12% in the States, I’d noticed. Was closer to 20%. And not from 85K. I was a postdoc. 🙂 First two years I was non-resident for tax purposes and could not claim standardized deductions, and then I became a resident and there was some 6 or 7% Social Security tax or something…
Too difficult to dig up my old US tax returns, the new Canadian ones are in electronic form and were easy to find…
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“If I’d paid only 11-12% in the States, I’d noticed. Was closer to 20%.”
-Really?? Never happened to me in the US. Canada even tried taxing the student stipend I was paid in the US by an American university. Appalling.
I don’t even know what my status here is. It’s too confusing.
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*However, if we are talking about young professionals, these are people who don’t really need (for the most part) any ultra-expensive medical services. I’ve had many conversations with younger Canadians defending the healthcare system of Canada from their criticisms.*
I see it as a classic problem of free-riders. Many young men (for some reason that medical system Israeli expert talked of US young *men*) don’t want to pay much for medical insurance, if at all. However, when time comes and those people get diseases later, everybody wants to get treated. Where should money come from? In US free market didn’t provide adequately for old, thus Medicare program (Medicare – for old, Medicaid – as seen from the ending “aid”, help – for poor). If government doesn’t want to let some old people die from preventable diseases, and I don’t want to live in such society, then everybody must pay. Of course, everybody wants not to pay while young and get the service while old, but money has to come from somewhere.
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The criticism I level at the Canadian system is that I am paying for a system that I can’t access. The emergency room at the local hospital is closed from 8am Friday – 8am Monday. Almost every weekend. Couldn’t get a family doctor for 10 years. Yet my (income) tax rates are exactly the same as the person living in downtown Montreal who has access 24/7. And no-one sees this as a problem. Maybe we should just stuff all of Canada into Montreal, Toronto and Vancouver.
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Yes, I was going to write my next post precisely about this issue. It isn’t as good for Montrealers as you think, either.
Just give me a moment and I’ll write about it.
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The thing is, it only takes one bad incident — like a severely broken bone that requires surgery and pins — to saddle a young man with debt for years (the price of a very expensive car, only without the car). Young people who have had insurance coverage from their parents have no clue how expensive medical procedures are…and they still have the mindset of “I am invincible” that many teens/young adults have.
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The US-style health system wouldn’t solve this problem either – it wouldn’t be a stretch to see how it would only serve to make it worse. Professionals are generally drawn to where they can earn the most for their services. That seems like a reasonable action on their part. But what happens to those of us who don’t live in the major population centres? Do I have to live in Toronto to get the services I’m already paying for?
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As someone who owns a small business in Canada, oh, how I relate………… 😦
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I hear you – policies which are well meaning (NS is raising minimum wage again this October – it’s gone from 7.50/hr to 10/hr in the last 2 years) can be crippling to the small business. There is definitely a popular belief that if you own a business, you’re automatically filthy rich and that you got that way on the backs of the poor. Therefore, you should be made to suffer. While this may be true in rare cases, in a broad sense, it is not. But why let reality get in the way – just ask the NDP.
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For US example look here, for instance (page 5):
Click to access W2.pdf
Do not know how realistic the numbers are, but if they are, then the total taxes withheld at source come up to 19+% on the 6.6K (not even 66K) income.
Quebec 15% sales tax sucks. It is 12% in BC. But food is tax-free, and for average size purchases one can always go to NH or NJ 🙂 🙂
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These are taxes that are withheld from the paycheck, true. But a greater sum is always withheld to give you a return after that. I always get very good returns in the US. I’m planning to use the next one to travel to Europe in March. In Canada, I once got a return of $9. Once, for 14. One time, however, I got lucky and got back an enormously huge sum of $145.
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I just counted and my tax return last time was 5.5% of the entire salary. A year before it was a little less.
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Of course, the taxes were much higher on the East Coast. In CT, I never got any return. But I was a student, so my status must have been different.
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“Once again, working more and harder to bring your salary from one level to the next makes no immediate practical sense to people, since the salary increase will immediately push them into an even more highly taxed income bracket.”
That argument is utterly ridiculous and utterly false. Stop having sex Chris Christie, please!
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I have no problem with adultery (I you don’t lie to your partner), but not with Chris Christie. Find someone else!
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I;m not sure who this Chris is, David. 🙂
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Chris Christie is the governor of New Jersey. He is a University of Delaware alumnus. Some here regard him as one of our success stories. I do not.
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Oh, of course. I must be stupid today. Of course, I know who he is.
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And you have the same thinking than him about welfare.
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I’m quoting several people I know verbatim on this. Whether they are right or wrong in this assessment is irrelevant, What’s important that this is how people feel and it colors their attitudes to many things.
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Maybe they’re right, in fact. But you seem to use these examples a a strawman-like argument against social welfare beneficiaries, so I don’t support you on this.
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“But you seem to use these examples a a strawman-like argument against social welfare beneficiaries”
You forgot to add the word “some.” SOME beneficiaries, obviously not all.
When I write stories about college prof who are jerks, does it mean that I suggest all college profs are jerks? When I write about women who are criminals, do I condemn all women?
Just think about it.
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In part I, you wrote this:
“The system of welfare in Quebec seems to rely on the basic conviction that if a person doesn’t feel like working for whatever reason, then she or he should be allowed to do so and be provided with basic necessities by society. (In Nova Scotia, this idea is less strong but it’s still there, at least do a degree.) If you want to spend your entire life in Canada and not work for a single day, you can absolutely do that. Abusing the system is very easy. ”
That’s not my over-generalization, that’s yours!
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Which specific statement do you disagree with? That abusing the system is easy? That one can spend one’s entire life without working a single day? I know people who are doing just that. One of them, for over a quarter of a century.
That the system of welfare relies on this idea? I heard it stated many times by people who are in complete support of both the system and the idea.
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“The Canadian tax people never persecute the large corporations, of course. They just choose some poor schmuck trying to run a small Mom and Pop business and squeeze him until he hands over everything he has and declares bankruptcy. They actually tell that to you face when you beg them to see reason and not fine you for an amount you simply do not possess.”
I agree.
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Nobody does. No mouse will step forward to bell the cat. Not even the mouse called “the state.” Which is part of the basis to my belief that there is more real Power in business than in government.
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The government is just a group of puppets placed in public view by BIG business. A puppet never has more power than the puppet-master.
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V: I am confused. How did you manage to pay nearly half of what the actual rates are both on provincial and federal levels??
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I think many people will now want the phone number of V.s accountant. 🙂
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If you live in California, you probably pay more in taxes that most Canadians do (and certainly ore that almost all other Americans, save some of those in the New England states, do.)
We pay extra for things like state-sponsored health insurance programs, welfare payment programs like Cal-Works, and education funds. I agree with social safety net programs in theory, but the abuse here has become RAMPANT to the point of insanity.
People come from Mexico to go to out ERs and urgent care clinics. They have babies here, and then qualify for Medi-Cal (Medicaid plus) as well as housing subsidies. Now illegal immigrants can get Cal-Grants to pay for their university education…it has really gotten out of control.
Sales tax in LA county is 8.75% and set to rise…it’s more up in SF!
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California originally belonged to Mexicans. So you are the one who is occupying their land and they are kind enough to tolerate you. Be careful, or we might just decide that it’s your babies who are not needed around here.
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Mexicans didn’t do much with California; it was the backwater of the Spanish empire, and then the northern fringe of Mexico. I don’t have any babies because I am too busy working and keeping my figure svelte. Mexican culture is not that conducive to female empowerment. These families promote pregnancy as a status achievement for young women, rather than education and careers…
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I especially love it when people come to educate me, a professor of Hispanic Civilization with a PhD from Yale, on the history of the Spanish Empire. Please, don’t make yourself look silly. There is a bunch of leading scholars in the field of Hispanic Studies read this blog.
I hope you are not older than 15. Because people who are preoccupied with “keeping their figure svelte” past that stage suffer from developmental retardation.
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