Canada inches toward private medicine...Interesting
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Posted on: 12-08-05 14:01:12
Quote:
Orginally posted by alexm
Anyway, my point in asking was because I remember seeing a post where someone said you get 2-3x your salary in India on moving to Canada. But factor in the higher tax rates and cost of living and suddenly you are not much, if at all, better off than in India.
The average tax rate in Canada on an income in the region of $70k - $80k is about 25% - 27%, when one factors in the personal exemptions available and the effect of lower tax rates in the lower slabs (upto about $65k).
Using a 2x – 3x comparison with India, one could actually end up paying a higher rate. For example I recall when I worked in India back in the late-90’s, my average tax rate was over 30%, because the lower tax bracket thresholds were pretty low and one hit the 40% bracket at about Rs 120k.
I used the example of Europe, because apart from the US, every country in the western world has some form of an expenditure tax at the federal level.
Interesting...your point about tax for 70-80K bracket being around 25-27%. I hadn't looked at the personal exemptions. I guess I had a pretty misconception about the tax hit which was really making me think whether moving was going to be a good idea after all.
Although, from what you say...it seems as though tax rates are almost as low as that for the States in this bracket. That can't be true right? Especially when you figure that Canadians get more social services.
Btw, tax brackets are much better in India nowadays. The govt lets you keep a decent chunk of what you make 
Quote:
Orginally posted by alexm
Although, from what you say...it seems as though tax rates are almost as low as that for the States in this bracket.
One difference that does turn out to be quite significant. Mortgage interest is deductible in the US, which is not the case in Canada.
Quote:
Orginally posted by alexm
That can't be true right? Especially when you figure that Canadians get more social services.
Here's the approximate math for Ontario:
To $8k - Nil (personal exemption)
$8k - $32k = $5.5k (at 22%)
$32k - $64k = $10k (at 31%)
$64k - $80k = $6k (at 37%)
Total taxes = $21.5k on an income of $80k - effective rate ~27%.
This can be reduced significantly with a $15k contribution to an RRSP scheme, would bring the effective rate down to a little less than 20%.
Quote:
Orginally posted by alexm
Btw, tax brackets are much better in India nowadays. The govt lets you keep a decent chunk of what you make
Incomes greater than Rs 10 lakhs are still taxed at 40%, aren't they? Besides, Indian packages at that level invariably include non-cash perquisites that end up taxed. I believe an income level of about Rs 15 lakhs would still be taxed at an effective rate greater than 30%.
My apologies to anyone who's clicking on this thread to read about private medicine....
If and when Canada does get private healthcare (meaning govt gives it up completely) would taxes come down?
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I once made a mistake, but I was wrong about it.
Yes, there is an additional tax of 10% on income above 10 lakhs. I suppose what I meant is that I seem to still see quite a lot in bank account at the end of every month after taxes are deducted etc.
I guess I was more trying to get some clarity on the perception that Canada is one of the more highly taxed countries in the world.
India may tax at a slab of 30% after one lakh but there are still deductibles like your mortgage payment/rent, medical expenses etc. So again, your taxable income is lower. I have not done the math but I believe it is still (quite a bit) lower than Canada.
Question for any Ukers on this site.
I have heard that in your public health system, the cost of some if not all drugs are included. Is this true?
Will any one of us in Canada agree to pay a little more in taxes to cover for prescription drugs?
I wouldnt mind. Why not go the distance?
??
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I once made a mistake, but I was wrong about it.
