Can one our Canadian DUers educate me on your tax system...?

[SnoopDog]

I know there is Federal Taxes like the USA. What are the general percentages based on normal brackets?

Is there a Provincial Tax?
How about City/County taxes? Property taxes? Sales taxes?

Please excuse my lack of knowledge on this subject - I did read alittle at the Canadian Tax web site and looked at the schedules. I was just hoping to get a basic testimonial.

Also, what do you get for your taxes? Americans get nothing. I understand your health care is provided as part of your taxes - right?

Any info is greatly appreciated.

[Beaver Tail]

1. It depends on the province you live in

There are two taxes on the purchase of items, the Provincial Sales Tax which varies from province and the Goods and Services Tax which is a 7% Federal Sales Tax.

In some provinces they have a harmonized sales tax (HST) which combines both the Provincial and Federal Tax into one tax (called HST).

The purpose of the GST was to replace the old hidden tax system at the federal level so teh tax is now visible.

I have never seen a City Tax or County tax regarding purchase of items unless you are talking about property taxes which I am not the best person to speak on.

I dont know about USA but in Canada the Provincial Sales Tax, Goods and Services Tax, Property Tax etc… cannot be claimed on your tax return (this includes Mortgage) but (at least in my area) cost of living is much lower. A 3 bedroom bulglow with basement in a residential area goes for under 95k

[SnoopDog]

2. Thanks...what Province do you live in?

And what about federal tax? I know it depends on your Province - is there a large difference between the highest and lowest Province tax?

Thank you for responding...!

[Beaver Tail]

3. Couldn't answer the Provincial Tax

as I have only lived in two different provinces.

For the area I live in when it comes to Federal Tax if you earn below 30K you can expect about 20% of your income to go to federal taxes. Below 100k I think it is 35%. I cannot say this with absolute confidence but I will ask my wife when I get home tonight. She used to be a small business owner and would know better than I.

I live in New Brunswick. I am a "stones throw) (about 1 1/4 hours) from the US border

Let me look at my tax return tonight and I will see if I can get you better information.

[SnoopDog]

4. Many thanks...!

[Telly Savalas]

5. Here's some info

Here's a page which outlines the federal tax rate and the tax rates across the provinces:

http://www.cra-arc.gc.ca/tax/individuals/faq/taxrates-e.html

My suspicion is that in total the Canadian tax system isn't much more progressive than that of the U.S. (The income tax rates are in the same ballpark and there's the 15% sales tax.) However, social services are much better because the tax dollars aren't pissed away on a bloated military and unnecessary pork programs.

[SnoopDog]

6. So the health care is included - right?

Is this the extent of your tax system
- federal tax (based on income, investments, and what Province)
- sales tax 15%

No property tax or city/county as Beaver Tail stated?

Thanks for helping me!

[Telly Savalas]

7. I think Beaver Tail was saying...

that there are no municipal sales taxes (only the provincial and federal), but that there are property taxes.

In addition to all of the above, there's the corporate tax and the capital gains tax.

At the provincial level there are "sin" taxes on booze and smokes. I think the gasoline tax is levied from both the federal and provincial level. Furthermore, British Columbia, Alberta, and Ontario have healthcare premiums (generally around several hundred dollars per person annually). Healthcare is paid for from the general revenue fund so in essence these "premiums" are simply really regressive taxes.

There are probably other taxes I'm forgetting about, but I'd guess that the ones mentioned in this thread make up over 95% of government revenue in Canada.

All of these taxes contribute to the healthcare system. And since these taxes are on par with those of the U.S., anyone who tries to feed you that line about the U.S. not being able to afford universal health care is full of shit.

[SnoopDog]

11. But the corporate tax is only for corporations not citizens - right?

Actually, I do run my own business. I pay myself a wage (w2) and what is left is profit I pass to the stock holders - thats me (I am a s-corp).

So I am sure the s-corp (or equivalent) would get taxed then the income I pay myself.

No matter what - countries tax you to death. But, as I said, America does NOTHING for the citizenship and it seems Canada provides a few goods and services. I rather pay my takes to a country that provides some benefits.

Does Canada have a large Armed Force?

[CHIMO]

19. Just To Add

A few items. For a business any GST that the company pays when purchasing is deductible from the GST that the company collects for the government. So in effect the company is taxed GST on the value that it adds to a product.

Insurance
Each provence has workman's compensation or some similar policy to insure workers. Each company pays a per hour rate to the group so that if someone is injured at work they may receive compensation for lost time. It also goes toward a medical aspect as the medical billings are not completely covered by the government but by the fund. The rate paid per employee is a function of type of industry and past history. This does not cover any liability insurance for customers or quality of work type of insurance.

The government pension plan requires that each employee pay based on their income to maximum income of around 40,000.00. The employee pays about a matching amount per employee.

Employment Insurance/Formerly called Unemployment Insurance
Each employee pays a percentage of their income toward this. The employer makes approximately a matching contribution per employee. Contributions stop when the employee reaches about 40,000.00. As an director of your company you probably wouldn't want to pay this as it would be quite hard to collect. They could assume that one was not working hard enough to obtain new business. In such cases one can choose to opt out of the plan. But if you have employees the corporation would still have to pay for them.

GST
One can pretty much assume that it applies to everything that an individual buys except food that is to be prepared at home. There may be some other items but I am not up on all of this.

Provincial Sales Tax
It varies from provence to provence. Alberta does not have any.

Some Differences.
There is no tax on the sale of your personal residence. So if you sell your residence there is no tax on the gain and no loss that can be claimed. However, one can not deduct the interest on the mortgage payments.

Hope that I haven't made too many errors here. The best way to see the income taxes payable is to go to the government web sites. The one provence that collects its own income taxes is Quebec. Thus if one is looking at the federal taxes for a Quebec resident they would appear lower because the Quebec income tax is not included.

I don't know what the S type of company means or what would be the equivalent in Canada.

Hope this helps a bit and perhaps twigs a few more responses.
A company pays taxes on what is left over after paying employees and services.

[SnoopDog]

20. Yes, thanks. I have reviewed web sites - it is nice to hear from y'all

Testimonials are invaluable - gives personal insight!

From what I am reading, there are more taxes in Canada (I think). But Canadians at least GET SOMETHING for their money.

Anyone able, possibly, to compare taxes in USA vs Canada?

[CHIMO]

21. Well

If you could establish some reference, other than a comparison with the US. For example is health insurance a tax? What are the necessities that one must consider. Are you asking for the effective tax rate for someone in Alberta at the min wage of about 5.90 or for someone making 1,000,000.00 in Ontario?

Kinda hard to answer an open ended request. Especially when very few know what the taxes are beyond their own personal requirements.

[SnoopDog]

22. right...too many variables....thanks.

[CHIMO]

23. Glad To Help

As to your question about military. After trying to find a government site to no avail I found this article. It is for the National Defense Budget for the year 2001-2002.

The Canadian Department of National Defense budget for the period of 2001-2002 was $11.7 billion in Canadian currency, which is about 1.1 percent of its Gross Domestic Product (Department of National Defense).

http://www.mala.bc.ca/~soules/mTheory/vol3/michael/canada.htm

To put this into US perspective it would amount to an equivalent expense of about 100 billion for the US.

As the world has been beating on our heads to increase spending, one could expect this to increase somewhat over the coming years.

[SnoopDog]

24. Just to be clear...

I am interested in knowing about your military because I just hope Canada has the ability to defend herself.

I feel it is an inherent right and responsibility that all countries and each person be able to defend oneself. And, also, only to spend a proper amount of money. Remember, at least how I feel, that the military is ONLY for defense - not offense. (One could argue that an offensive is only allowed if backed into a corner - then that to would be labeled defensive).

I draw on the analogy of our own human body. We have white blood cells that attack 'bugs' that could harm or kill us. Defense is mandatory as it parallels our own human body and all living things.

Watch 'our' backs.

[CHIMO]

25. Well

It would help if we knew who the enemy was or is, with respect to the military. As a country with only two provinces not bordering salt water it is a large task.

I think that we are having a bit of a problem defending ourselves from the corporations. But the military is not much help there.

As far as personal defense goes, I don't have much in the way of boxing skills or other such skills but then again most others don't either.

[iverglas]

26. yeah ...

I feel it is an inherent right and responsibility that all countries and each person be able to defend oneself.

That one, I've just never been able to figure out.

If I'm "responsible" for defending myself ... to whom do I owe this responsibility? Ditto this alleged Canadian responsibility?

I think it's kinda up to individuals and collectivities to decide what their own responsibilities to themselves are, meself.

And you might want to note that many who think that Canada should increase military spending ... and I'm kind of joining that crowd myself, although I'm wondering how manipulated I'm being ... think this because they are concerned about Canada's ability to fulfil international responsibilities that have absolutely nothing to do with "self-defence", but relate to our commitment to peacekeeping and, if necessary, humanitarian intervention.

To call such activities "offensive" (as compared to defensive) might be correct in some circumstances (some question our role in Afghanistan on that basis). In principle, however, they are neither defensive nor offensive, i.e. they are not undertaken out of self-interest. They are undertaken in the interest of peoples in need of assistance, and in the global collective interest (and they certainly also reflect far-sighted and enlightened self-interest).

Essentially, our military is highly unlikely to be called on to play any defensive role in any near future, and we are more than unlikely to undertake any offensive military action in our own interest -- but the Canadian Forces are still quite important to the role that Canada regards itself as having in the world.

[Hand]

9. Not quite...

Heh heh, there are property taxes. In some cases, especially where rural coastal areas are becoming gentrified, some long-time residents are getting some nasty surprises when the assessed value of their property suddenly goes through the roof.

Actually, I may be one of them. Our house's assesed value went up about 25% this year for exactly those reasons, but we're not the worst case by any means. :grr:

[SnoopDog]

13. To what tax authority would property taxes be paid?

As you may know, our counties collect our property taxes.

[Hand]

16. It may vary...

In Nova Scotia, property taxes are set and paid provincially. Elsewhere this might occur on a municipal level. Anyone? Anyone? Bueller? :shrug:

[Hand]

8. HST, aka Horse Shit Tax

In Nova Scotia, it was originally called the BST (blended sales tax), but of course the initials were an immediate show-stopper (DUH!). The name was quickly changed, but that didn't stop cranky and creative Bluenosers! :rofl:

[SixStrings]

10. Please explain...

Please explain this point...

"The purpose of the GST was to replace the old hidden tax system at the federal level so teh tax is now visible."

a) What 'old hidden tax system'?
b) who brought it in (the 'old hidden tax system - not the GST)

I thought this was a tax created by Brian Mulroney to destroy Canada as we know it?

[SnoopDog]

12. So they want to destroy Canada just like * wants to destroy America?

[achtung_circus]

18. There used to be a manufacturer's sales tax

levied on manufactured goods at the federal level. Most people didn't know about it, they just paid it as part of the purchase price of goods. It was typically 13% at the manufacturer's level. On climate control stuff, it was 8.5%. So I, as a purchaser of pumps, would sign a certificate that the end used was for pumping hot water to radiators, rather than pumping water out of ditches, and get a break on the sales tax.

It was replaced by a value added tax at the retail level. This is the Goods and Services Tax, payable on a much broader range of items. It is VERY visible, also known as the Gouging and Screwing Tax. It was designed to be "revenue neutral", most people don't believe it.

[GirlinContempt]

14. Also

not all goods are taxed. All I have to add.

[applegrove]

15. To balance the budget and pay for health care they came up with

a Vat Tax (modeled on New Zealand which got its house in order using the same thing). People grumble but you only pay it on things that are not necessities. Like haircuts and restaurant meals and teenyboppers shopping for clothes with their parent's money. I don't think you pay tax at second hand places (that sell clothes). Also too not at the grocery.

So if you save your money and don't follow fashion trends every year, or decorate your house with the latest decor trends, or whatever...you don't pay as much GST.

And the GST covers the cost of health care. And good schools and all. And it is on top of a progressive tax system.

Well worth it to be able to take the subway anywhere in a city of 3 million and feel safe all the time - and at awe at how diversified our cities are.

[iverglas]

27. aargh!!

To balance the budget and pay for health care they came up with a Vat Tax

I think this is not the first time you have said this -- and it's just as wrong this time! The GST has absolutely nothing to do with paying for health care.

And -- say what?? Now it's schools too? and --

And the GST covers the cost of health care. And good schools and all. And it is on top of a progressive tax system.

... a tax on consumption is "progressive"?? What loony school of economic thought does this come from??

If people with low incomes actually never bought new clothes or video games, and the rag-tag necessities they bought were not taxed, yeah, maybe it would be a tax on the rich.

The fact is that people with low incomes *do* buy new clothes and video games ... and take-out food -- and I'm damned glad they do, because I wouldn't want low-income kids walking around in Sally Ann rayments playing with sticks and tin cans while their well-to-do classmates sneered. (I'm not a fan of consumption, particularly the gluttonous and misguided consumption of kids today, but I'm not going to fault the poor for what is actually their proportionately lower contribution to the phenomenon.)

Consumption taxes are regressive by definition -- they cost the low-income a higher share of their income than they cost the high-income. And the consumption tax rate in Canada -- PST + GST, in whatever form -- is an abomination.

... Yikes, now it's the GST we have to thank for public transit. (How did Mtl and TO ever manage to build those subways without it?)

Well worth it to be able to take the subway anywhere in a city of 3 million and feel safe all the time - and at awe at how diversified our cities are.

The GST may indeed be contributing to paying the cost of the public goods we enjoy -- but it is entirely the wrong way to be paying it.

One other reason why this is bad: it reduces demand for goods and services, particularly in local markets for locally produced goods and services. (Cuts to income assistance payments have the same effect.) The same fact that makes consumption taxes a disproportionate burden on the poor -- the fact that a far higher proportion of their income goes to pay those taxes -- makes it have a greater negative impact on local economies than a progressive income tax made higher at the top end would.

The poor spend all their incomes directly on goods and services, generally within a few blocks of where they live: local grocers and the like. If that money is taken out of circulation, whether in the form of welfare cuts or consumption taxes, local businesses are the biggest losers.

I'm quite happy to pay taxes (and quite a lot of 'em) to support our system for the delivery of those public goods -- but not to have this disproportionate burden placed on the low-income, and this stifling effect on local economies.

[SnoopDog]

17. I thank my friends to the north for your time and info!

Any additional info you have is deeply appreciated.