High Taxes driving high earners south

[Argus]

Diane Francis points out how much taxes have increased in just the last two years for higher income earners, and what impact this is having on people fleeing Canada for the US, where taxes were recently cut. Reminder: Canada is actually experiencing a reasonably thriving economy. Why is it then that taxes AND deficits keep going up? It couldn't be because of Liberals at the helm, could it?

The top tax Ontario rate, for those lucky enough to make a good income (or pension), has soared in Ontario from 49 per cent to 53.53 per cent since 2015 – an obscene jump of 9.2 per cent. In what universe, or nation-state, does this occur minus the excuse of a recession or a war or a calamity of some kind?

This is nation-busting stuff, the kind of disincentive that underlies Canada’s brain drain of doctors, nurses, tech workers, and entrepreneurs to the United States and elsewhere. Just watch the enormous economic damage done when Congress extends its permission for snowbirds by two months – to eight months a year – to stay in the U.S. without becoming taxable.

http://business.financialpost.com/diane-francis/gouging-the-middle-class-must-end-or-the-brain-drain-to-the-u-s-will-continue-unabated

TWO THIRDS of software engineering graduates aren't even trying, but are leaving instantly for the US upon graduation. Why stay here when there's such high taxes, and when the government allows tech companies to import temporary foreign workers at low wages that allow them to pay half what Silicon Valley pays? How do we build a high tech industry on the backs of low paid temporary foregn workers while sending two thirds of OUR people south to fuel US industry?

https://www.theglobeandmail.com/business/technology/article-canada-facing-brain-drain-as-young-tech-talent-leaves-for-silicon/

 

Edited May 6, 2018 by Argus

[bush_cheney2004]

Canadians in large numbers have always gone "south of the border", and will continue to do so...be taxes high or low.   Sure, taxes matter, but so does greater opportunity, higher pay, warmer weather, more products/services, and lower cost of living.   From the link above:

Quote

Canada remains America’s “farm team” and as long as taxes outpace growth this will continue.

 

Crossing the U.S. border is a presumed option for many Canadians, and that includes sponsored employment with lower taxes.   "Free" universal health insurance in Canada can't compete with higher salaried U.S. company paid benefits and no long health care wait lists.   Many Canadians with the skills and desire to do better will continue to leave Canada for the evil USA.    It's a Canadian value.

 

[Centerpiece]

3 hours ago, bush_cheney2004 said:

 "Free" universal health insurance in Canada can't compete with higher salaried U.S. company paid benefits and no long health care wait lists.   Many Canadians with the skills and desire to do better will continue to leave Canada for the evil USA.    It's a Canadian value.

Especially when you can come back home if you get sick - or stay there and claim the equivalent cost from Medicare.

[eyeball]

5 hours ago, bush_cheney2004 said:

Canadians in large numbers have always gone "south of the border", and will continue to do so...be taxes high or low.   Sure, taxes matter, but so does greater opportunity, higher pay, warmer weather, more products/services, and lower cost of living.   From the link above:

As usual what the link or any economist says about economic dynamics or performance is neither here nor there without factoring in whether the physical basis for the economy, natural capital, i.e things like wild fish stocks or old growth forests are dwindling or expanding.

This makes no assumptions that US economists do account for this but given America's more robust and effective environmental laws that protect natural ecosystems the best that can be said is that the US stock of natural capital is probably in better hands than Canada's.  I note that far more American fishermen are still making a living fishing while the opposite is true in Canada - mind you the opportunity to do so has been far more concentrated into corporate hands in Canada than the US.   Sometimes Americans are far more socialist when it comes to the little guy.

What's really true is that Americans enjoy far more democracy and jurisdiction at their local and regional level than Canada where authority, like fish, is concentrated into far fewer hands often thousands of kms away from locals that are affected by that concentration.

If I had to do it all over again knowing what I know now I would have emigrated north to Alaska.

Edited May 6, 2018 by eyeball

[PIK]

We need the money for the 100,000s of irregulars that are on the way.

[marcus]

6 hours ago, PIK said:

We need the money for the 100,000s of irregulars that are on the way.

Can you back up the claim that there are 100K asylum seekers that will be coming to Canada? 

[bush_cheney2004]

1 hour ago, marcus said:

Can you back up the claim that there are 100K asylum seekers that will be coming to Canada? 

 

Already happening....more than 20,000 "irregulars" (illegals) just last year on top of "regulars" (legal refugees).

https://www.theglobeandmail.com/opinion/article-illegal-border-crossers-could-erode-confidence-in-canadas-immigration/

[Bonam]

On 5/6/2018 at 9:42 AM, Argus said:

Diane Francis points out how much taxes have increased in just the last two years for higher income earners, and what impact this is having on people fleeing Canada for the US, where taxes were recently cut. Reminder: Canada is actually experiencing a reasonably thriving economy. Why is it then that taxes AND deficits keep going up? It couldn't be because of Liberals at the helm, could it?

Lots of US jurisdictions are busy raising taxes and deficits as quickly as possible, too. Here in Seattle, not a week passes by that the city council doesn't invent some outrageous new tax scheme. That said, some of the highest tax jurisdictions (like California and New York) are the top locations for people to head to for finding high paying jobs. 

[Argus]

1 hour ago, Bonam said:

Lots of US jurisdictions are busy raising taxes and deficits as quickly as possible, too. Here in Seattle, not a week passes by that the city council doesn't invent some outrageous new tax scheme. That said, some of the highest tax jurisdictions (like California and New York) are the top locations for people to head to for finding high paying jobs. 

They're not as high tax as Canada. The top marginal tax rate in for federal/Ontario is 53.53% on income over $220k Canadian ($171K us). That compares to a rate of 32% in the US for income over US$157k, 35% over $200k, and 37% over $500k.

And in the US, up until next year anyway, people can deduct state and local taxes from their federal taxes. In Canada provincial and local taxes go ON TOP of your federal taxes.  The new tax bill will limit that to $10,000 (unless it gets changed), but that should still cover a lot for most people.

And they tend to be much higher salaries. How do tech companies get away with paying half the rate of tech companies in the states? Simple. They advertise a job opening which requires 5 years experience at some sort of technical job at a low salary, then when nobody applies they go to the government and the government lets' them bring in a TFW at that rate. Problem solved. 

Edited May 8, 2018 by Argus

[marcus]

4 hours ago, bush_cheney2004 said:

 

Already happening....more than 20,000 "irregulars" (illegals) just last year on top of "regulars" (legal refugees).

https://www.theglobeandmail.com/opinion/article-illegal-border-crossers-could-erode-confidence-in-canadas-immigration/

There is a difference between 100k and 20k. You can't just throw numbers out there without facts backing it up. We have enough fake news out there. Enough already.

[marcus]

1 hour ago, Argus said:

How do tech companies get away with paying half the rate of tech companies in the states? Simple. They advertise a job opening which requires 5 years experience at some sort of technical job at a low salary, then when nobody applies they go to the government and the government lets' them bring in a TFW at that rate. Problem solved. 

You're incorrect.

The Canadian employer have to pay the TFW employee the median wage for that occupation. For example, if they want to fill a software engineer position and cannot hire a Canadian to fill it, then they can apply for Labour Market Impact Assessment with a salary of at least $38.46/hour, which is the median wage for that occupation in that region. 

The LMIA application is a difficult application. As you know, I work in the industry and there is a real shortage of qualified workers in specific industry. Western countries + the emerging markets are battling to hire engineers and trades people.

 

[Argus]

33 minutes ago, marcus said:

There is a difference between 100k and 20k. You can't just throw numbers out there without facts backing it up. We have enough fake news out there. Enough already.

We took in 50k refugees last year. Numbers indicate we could get 60k border crossers alone this year. There's your 100k in just two years.

 

[Argus]

6 minutes ago, marcus said:

You're incorrect.

The Canadian employer have to pay the TFW employee the median wage for that occupation. For example, if they want to fill a software engineer position and cannot hire a Canadian to fill it, then they can apply for Labour Market Impact Assessment with a salary of at least $38.46/hour, which is the median wage for that occupation in that region. 

The LMIA application is a difficult application. As you know, I work in the industry and there is a real shortage of qualified workers in specific industry. Western countries + the emerging markets are battling to hire engineers and trades people.

And what would happen if you raised the median wage? Then you could hire some of those people going south. If two thirds of the graduating class is flying south that tells me that salaries here are too damn low.

Years ago I answered an ad for a competition for a tech writer. I passed the test, then they announced the salary. I forget what it was, but it was ridiculously low. I told them to shove their job. I didn't realize it at the time but clearly it was just going through the motions so they could demonstrate they couldn't find anyone. 

[bush_cheney2004]

1 hour ago, marcus said:

There is a difference between 100k and 20k. You can't just throw numbers out there without facts backing it up. We have enough fake news out there. Enough already.

 

Sorry, but denying the past totals and more expected refugees this year and the next will easily exceed 100K.

[AngusThermopyle]

1 hour ago, bush_cheney2004 said:

 

Sorry, but denying the past totals and more expected refugees this year and the next will easily exceed 100K.

Correct. So far this year the numbers have been over 100% higher than this time last year. Easter weekend alone saw over 600 illegal (sorry, irregular) crossings at Roxham road.

[marcus]

5 hours ago, Argus said:

We took in 50k refugees last year.

In 2017, we took in 7,500 government assisted refugees (cherry picked from refugee camps abroad), 15,000 in Canada claimants who have been accepted (border crossers are among them), and 16,000 privately sponsored (meaning that taxes are not paying for them - private individuals/groups are).

Quote

Numbers indicate we could get 60k border crossers alone this year. There's your 100k in just two years.

Show me where you got the numbers.

There is a lot of misinformation being shared by you guys.

There are two major deficiencies in the argument by the anti-refugee crowd:

A )There is a process involved when a person comes across the border and makes a refugee claim. If they're accepted, the process usually takes at least 2.5 years before they can become permanent resident. Part of the process also includes a multi-layer security/background check process. 

B ) The numbers. There are a lot of numbers being thrown out. Since the beginning of 2017, 28,000 people have crossed the border and have seeked asylum. Only 1% of them have so far been removed. However, the government has said that majority of them will not be accepted after due process. 

Those figures come as senior government ministers maintain they expect that close to 90 per cent of those who crossed the border at unofficial ports of entry will see their application to stay fail.

Since the beginning of January 2017 and up until the end of March 2018, the RCMP have intercepted 25,645 people crossing the border into Canada illegally. Public Safety Canada estimates another 2,500 came across in April for a total at just over 28,000.

Once an application for asylum has been received by the federal government, it takes about 19 months for the initial assessment and another 10 months for a final decision to be issued. A backlog of cases and a shortage of staff to process the applications have contributed to the wait times.

Link

 

Edited May 8, 2018 by marcus

[SpankyMcFarland]

How bad is this medical brain drain to the US? Canada remains an excellent place for physicians to work. 

[PIK]

17 hours ago, marcus said:

Can you back up the claim that there are 100K asylum seekers that will be coming to Canada? 

You are kidding.

[Bonam]

21 hours ago, marcus said:

You're incorrect.

The Canadian employer have to pay the TFW employee the median wage for that occupation. For example, if they want to fill a software engineer position and cannot hire a Canadian to fill it, then they can apply for Labour Market Impact Assessment with a salary of at least $38.46/hour, which is the median wage for that occupation in that region. 

Why would someone work for $38.46 CAD per hour in Vancouver when they can drive 2.5 hours south and get paid $60 USD ($77.70 CAD) per hour in Seattle? Double the salary, lower taxes on that higher salary, AND lower housing prices (though probably not for much longer). Canadian software engineers can easily get a TN visa to work in the US. 

[Hudson Jones]

6 minutes ago, Bonam said:

Why would someone work for $38.46 CAD per hour in Vancouver when they can drive 2.5 hours south and get paid $60 USD ($77.70 CAD) per hour in Seattle? Double the salary, lower taxes on that higher salary, AND lower housing prices (though probably not for much longer). Canadian software engineers can easily get a TN visa to work in the US. 

It's not taxes that are driving some workers down south. It's the free market that determines salary.

[Bonam]

32 minutes ago, Hudson Jones said:

It's not taxes that are driving some workers down south. It's the free market that determines salary.

Yes, for software engineers salaries are pretty close to a free market. 

[bush_cheney2004]

7 minutes ago, Bonam said:

Yes, for software engineers salaries are pretty close to a free market. 

 

Not when foreign workers are imported by consulting firms like Infosys and Accenture, which have suppressed some IT salaries in the U.S., Canada, and elsewhere.

I have personal experience with this cross border supply/demand dynamic....work visas, sponsorship, and green cards (permanent residency) are much easier to get for a lower salary or hourly consulting rate.

Edited May 9, 2018 by bush_cheney2004

[Argus]

1 hour ago, Bonam said:

Why would someone work for $38.46 CAD per hour in Vancouver when they can drive 2.5 hours south and get paid $60 USD ($77.70 CAD) per hour in Seattle? Double the salary, lower taxes on that higher salary, AND lower housing prices (though probably not for much longer). Canadian software engineers can easily get a TN visa to work in the US. 

WHY do you think that? Given two thirds of the graduating classes are heading south, is that not a good indication that the wages being offered here are simply not up to par?

[Argus]

1 hour ago, Bonam said:

Yes, for software engineers salaries are pretty close to a free market. 

If there was a free market, and if there was a shortage of people, then salaries would rise to attract some of those people who are streaming south. That this is not happening is absolute proof there is NOT a free market. Instead Canadian software companies simply refuse to raise their wages and go to the government to get TFWs instead.

[-TSS-]

Don't you have free health-care in Canada? I mean free in the sense it is funded from the taxes? That's what I have always thought: A stark contrast to the US-system of paying for insurance and if you don't have one then it is no can do.