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Canadians Pay Twice The Taxes As Americans


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Do Canadians get their money's worth? In the article, health care is a service that the higher taxes pay for, but free health care is not necessarily good health care.

1. http://www.canada.com/victoria/timescoloni...AC-EFC24A474D6D

Canadian tax burden still high

by Eric Beauchesne October 23, 2003

OTTAWA -- Canadians last year enjoyed one of the steepest drops in taxes in the industrial world but their tax burden remained nearly double that of Americans, their main trading partners and competitors, new international tax comparisons released Wednesday reveal.

In Canada, taxes as a proportion of total economic output or gross domestic product (GDP) fell 1.6 percentage points in 2002 to 33.5 from 35.1. Only Ireland, Greece and Turkey posted steeper declines.

However, the tax burden in the U.S. also fell by 0.9 to only 18 per cent of GDP from 18.9 in 2001, according to the OECD report.

Many, although not all, economists argue that everything else being equal, a lower tax burden attracts and encourages investment and employment.

While Canada's tax burden remains much higher than in the U.S. it's below the 36.9 per cent average for industrial countries, the report reveals. Canada's tax burden is also less than that of all the other Group of Seven major industrial countries, other than Japan.

The OECD report notes that the tax burden in some countries, including Canada and the U.S., may be overstated in that the tax-to-GDP ratio does not reflect the fact that some of those taxes are repaid to individuals or families in the form of tax credits, such as for social purposes.

However, the tax breaks for social purposes are relatively much more generous in the U.S., amounting to 1.4 per cent of GDP, than in Canada where they account for only 0.7 per cent of GDP, according to the report.

2. http://www.canada.com/toronto/news/story.a...9C-D89274AD1F86

"Hospital waiting times jump in one year: At 'historic' high"by Sharon Kirkey, CanWest News Service, Tuesday, October 21, 2003

OTTAWA - Hospital waiting times in Canada have almost doubled over the past decade, according to a new survey that found most Canadians are waiting longer than ever for new hips, cataract surgery and other treatments.

Canadians are waiting a median 17.7 weeks from a referral from a general practitioner to the actual treatment, a 7% jump over waiting times last year, according to the Fraser Institute's latest annual survey, Waiting Your Turn: Hospital Waiting Lists in Canada. The median wait means the length of time within which half the people waiting for a given type of surgery get it.

3. http://www.globeandmail.com/servlet/story/...Story/National/

"Canada's doctor shortage among worst in Western world"

Canada has one of the lowest ratios of doctors to population in the Western world, according to new figures from an international body.

The scarcity of Canadian doctors is in part the result of deliberate government policy. During the 1990s, provincial governments cut enrolment in medical and nursing schools as a strategy to cut medical costs.

In recent years, the federal government has increased health spending and enrolment, but working conditions remain a major complaint.

Canada is losing an average of 250 doctors each year, mainly to the United States. Many of them are leaving because they lack the support and facilities...three million Canadians do not have access to a family doctor.

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Taxation is only a portion of one's expenditure. In terms on how much overall tax Canadians pay in comparison to other countries, sure it's high. Compare how much a Canadian pays out of pocket to visit the doctor, it's low. Same with the rising cost of University too. That's because the cost of the visit and much of the tuition is already included in the taxes he pays.

The real comparison should be made is with the overall cost of living. Several years ago, a study indicated that the most expensive Canadian city to live in was ranked 78 in the world in which several more expensive cities were US cities. So our taxes may be proportionately high, but the trade-off is that even in the most expensive city it's still cheaper to live in Canada than several US cities.

Want another example? Everytime I visit the US, I take note of the price tag of several common items such as toiletries, gasoline, clothing, toys, etc. You know what? Except for gasoline, the price tags for all these items are the same. So taking into account the exchange rate, Americans pay about 50% more for their items than Canadians do. The famous Tilley Endurables hat costs in Canada about $55Cdn. In the US the same hat costs $55US.

Now let's get to the gasoline. When I was visiting San Fransisco two years ago, my host dropped by a gas station. I had a glimpse of the price of unleaded in USD per gal. In my head I roughly converted the gallons to litres and then the currency. Final result? Same price in San Francisco as we pay in Toronto.

So is tax high? Sure, but if you look at the big picture. It's better in Canada.

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uh we also get about twice the level of government services i would wager. ever pay for a dentist in teh states? its insance.

not to mention that by financing social problems, we actually SAVE money in the long run by preventing alot of pain and hassle.

there was a UofToronto prof who calculated that the US employs a huge number of people in completely redundant roles to track private health care charges. Thus canada is more efficient in that respect because we do not encourage redundant jobs in the free market. govenment does health care better, its more fair, and takes care of everyone for less. which produces its own benefits to society in the long run.

just measuring taxes with the context of the function of society is useless. we get way more social bang for our buck.

SirRiff

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Eight years ago, whenever a person supporting privatization and deregulation would state to me "Can the government do any better?" I would be silent as we all know the compentancy and service level of government agencies.

Today, after having lived through eight years of the Common-Sense Revolution, and the Paul Martin budget cuts I can confidently state "Yes, and the government can do no worse than private industry."

We need government regulators, and inspectors. Government run utilities and insurance may not be a necessity but the benefits are clear when comparing provinces that do have them vs those that don't. The economic theory of competition doesn't apply in these cases so private corporations run up prices while driving down services.

I would then gladly pay a rate of taxation fairly shared between individuals and corporations so that essential services can maintain a good level of security for us all.

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If government does such a bang up job with delivering health services, as an example, how come we have a shortage of MD's? Who do you think will do surgeries and deliver babies in the future...the MP's?

Right now Canadian citizens are paying high taxes to support a myth, not a reality. The mantra of free health services to all isn't worth the paper it's written on if you're one of the 3 million taxpayers without access to a family physician, or you're waiting 18 weeks for hip replacement, or you're needing Enbrel or Remicide for arthritis but can't get it because it's not an "approved" drug under the Patented Medicines Prices Review Board.

As for the much touted standard of living that politicians are apt to use to justify the burden of taxes, according to the UN's recent survey, the USA beat out Canada, so lower taxes does not appear to have harmed quality of life south of the border.

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Daniel,

There's no right wing conspiracy behind the failure of socialism. There's a limit to how much governments can tax individuals and corporations to support entitlements and prop up inefficiently run government run "enterprises." Ultimately, socialist governments drive away new business investors and also the country ends up suffering "brain drain" of its innovators/the best and brightest.

Take a look at what's happening in the EU. The 2 largest economies are in dire straights. That should be a warning for Canada.

http://www.techcentralstation.com/102403E.html

Liberté, égalité, bankruptcy!

By Jean-Christophe Mounicq

...It has not been widely reported to the French public that the European Commission and the OECD evaluate the French public debt as equal to 250 percent of GNP, if one includes future pensions that will have to be paid to their civil servants. The debt of France is 20 times the former debt of Argentina... before it went to bankruptcy...

http://www.faz.com/IN/INtemplates/eFAZ/doc...B-A6E4BBDCCFE4}

Germany loses appeal for venture capitalists

By Angela Maier

...Foreigners have a disastrous perception of German economic policy...

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Of course there is a right-wing conspiracy. Whenever I look at policy, I first question in whose interest it is in. Privatization of health care certainly is not in the interest of the general public - not even the rich. The poor don't have access, the rich become bankrupt with long term illnesses. The only ones who really benefit are the owners and investors of the privatized institutions - the campaign donors of our governments.

There certainly is a limit to how much governments can tax, yes, but in Canada the burden has been dramatically shifted towards the individuals from corporations. Corporations admitted by themselves benefit from a well educated citizenship from which it gets its employee-base. With just-in-time delivery, citizen paid highways become the warehouse of industries.

And the last I checked, the 40hr workweek hasn't devasted alot of the economies of North America. How would you like to work 60hrs averaged over consecutive four week periods before overtime is paid. Yep, Ontario under the conservatives.

And the brain-drain? What's not reported are those that return. We do have a shortage of doctors and nurses fed-up with the right-wing cutbacks of health care institutions . Admittedly, the rate of those returning are not high but those who do prefer the Canadian system inspite of the conversion towards the American model.

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You are a pretty sad apologist. Look at the tax rates between Canada and various states - in some cases the tax burden is double - on average it is 30-40% higher in Canada. [Fraser Institute, Jack Mintz, CD Howe Inst., Canadian Business].

Morgan is right - total debt and unfunded liabilities are crushing society in Canada and the EU. In Canada total per capita debt is $174 K. In the EU the Pension scam alone will cost 100 % of GDP by 2020. The Health Scam in both Canada and the EU will cost the same by 2020. In fact in Canada unfunded Health Liabilities rose by 38 % in the past 3 years [CTF: Walter Robinson, newsletter 10-18].

I pay more in tax than most people make in Gross salary. Is this fair ? Hell no. The money is better off to be invested, create jobs, create capital and put to use, then to be given to corrupts like Chretien and left of centre cowards who buy votes and spread money around like butter.

This is not what Canada is about. And the brain drain is real. Losing 40.000-30.000 talented people per year is a huge economic loss. Only 4-5.000 come back - mostly for health care access [like my parents for instance].

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There goes the name calling again.

So our individual tax burden is double - so what? How about the tax burden on corporations? You want to compete with places like Bhopal?

Again, you have to look at the big picture. Comparing overall cost of living, you are a winner in you live in Canada for the most expensive city in Canada to live in is way cheaper than alot of other cities around the world including alot of US cities of comparable size.

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That is simply untrue. The average wage in the US is 30 % higher. The average tax rate is 30 % lower. The cost of living depends on where you live, Austin Tx is 60 % cheaper to live in than Chicago - but so again are the Salaries lower. The Standard of living in the US is 35 % above that of Canada. I have posted numerous sources, articles and posts on this. I suggest you do a search on this site for these posts and educate yourself.

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The average wage in the US is 30 % higher. True, but is offset by the cost of living.

Common items in major Canadian cities have the same price tag as in major US cities. So Americans pay 30% more for the same items Canadians pay.

The cost of living depends on where you live. True. Furthermore, the most expensive Canadian city to live in is still cheaper than many US cities.

The Standard of living in the US is 35 % above that of Canada. So is the wage disparity between rich and poor.

I have posted numerous sources, articles and posts on this.

No doubt the same proof as those supplied to Colin Powell at the UN.

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  • Forum Admin
Common items in major Canadian cities have the same price tag as in major US cities. So Americans pay 30% more for the same items Canadians pay.

The cost of living depends on where you live. True. Furthermore, the most expensive Canadian city to live in is still cheaper than many US cities.

What evidence can you provide for these statements?

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The next time you cross the border, check out the price tags of various common items. You'll see that lots of common everyday items have the same price tag - go see for yourself if you don't believe me.

So converting the Cdn dollar to US or vice versa, American products in the US is 30% more than the Canadian equivalent in Canada.

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1. Perhaps the following urls comparing OECD nations re: Purchasing Power Parities and Comparitive Price Levels might help. See page 2 charts in both. For Comparative Price Levels, the chart is meant to be read vertically.

http://www.oecd.org/dataoecd/61/54/1876117.pdf

http://www.oecd.org/dataoecd/48/18/4098676.pdf

2. The USA was ranked ahead of Canada in the UN's 2003 Human Development Index list . The HDI measures adjusted real income, in addition to life expectancy and educational attainment. The USA was ranked #7, whereas Canada fell to #8.

http://www.undp.org/hdr2003/pdf/presskit/H...R03_PKE_HDI.pdf

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2. The USA was ranked ahead of Canada in the UN's 2003 Human Development Index list . The HDI measures adjusted real income, in addition to life expectancy and educational attainment. The USA was ranked #7, whereas Canada fell to #8.

the HDI is a great way to compare nations. but lets not forget canada was in the top 3 for a long time, so its not like we are just randomly on that list.

however if you look at some of the economic leads that the US has over Canada, say GDP per capita

7 United States 35,277

8 Canada 22,343

the 7th ranked US has a 60% higher GDP per capita.

if you look at the other raw indicators, you see the overwhelming economic lead of the US probably contributes alot to its position. Canadas standing are more largely reflected in health care and education.

personally, i would rather have the lead in social trends then pure $$$. that is why canada has different policies.

as for hosital waiting time and doctors, yeah its a bad situation. but i am unwilling to accept that social policy is entirely to blame, as the attractive earning potential of the US has been tough to compete with for many years now. however our average life expectancy is 79.2 vs 76.9 in the US. anybody who suggests that our method of health care is "broken" needs to account for the fact that there are no less then 21 nations and an average of 2.3 years seperating us. by definition, we live longer, and then our health system is "better"?

HDI VS. Life expectancy at birth (years) 2001

9 Japan 81.3

3 Sweden 79.9

26 Hong Kong, China (SAR) 79.7

2 Iceland 79.6

8 Canada 79.2

19 Spain 79.1

4 Australia 79.0

10 Switzerland 79.0

22 Israel 78.9

17 France 78.7

1 Norway 78.7

21 Italy 78.6

6 Belgium 78.5

16 Austria 78.3

5 Netherlands 78.2

24 Greece 78.1

15 Luxembourg 78.1

20 New Zealand 78.1

25 Cyprus 78.1

33 Malta 78.1

18 Germany 78.0

13 United Kingdom 77.9

42 Costa Rica 77.9

28 Singapore 77.8

14 Finland 77.8

27 Barbados 76.9

7 United States 76.9

SirRiff

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I must say that is some sound logic you got going there.

Even your figures seem to be right on. I checked.

But now how much does your theory take into account the vast differs of the US and these other countries?

Not a one of them comes close to having our population and yes the sheer size of it makes some differs. Also the death rate and mortality rate is something you did not mention. Why? Irrelevent?

Seems to me that even in the worst of times for us the life expectancy rate was controlled more by social variables than by quality of health care and if that is case seems to blow your theory. Sorry.

Our system is nothing less than broke. Your system is nothing more than adaquate.

Lawyers are more of a problem in our health care system than any other virus could be.

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HDI is NOT an adequate measure of anything.

Canada is ranked about 15-20th on any independent scale of competitiveness. The Fraser Institute and the Cato Institute provide a detailed deconstruction on the SUBJECTIVENESS of the HDI studies. They and other institutes have modelled a hard methodology [not soft and fuzzy like the HDI study], and according to the FI Canada is somewhere in terms of where to live, in the 12-16 range. This is backed up by the WEF study ranking Canada about 16th in terms of its competitiveness looking at economic, social, and governmental variables.

The HDI has been refuted by many people and is meaningless.

In the last HDI study by the way Canada ranked behind the US so what is your point ? That Canada is a better place to live in than the Congo ? We don't compete with 3rd world rat traps, but only with the US.

On a PPP basis Canada's per capita GDP is U$21 K vs. $34 K for the USA. Our tax base is 30 % higher on average, and our gross wages lower.

This massive difference means a huge standard of living gap with the Americans. It also means more socialised programs that bankrutp future tax payers, pay as you go systems that transfer monies immorally from the young to the old and from one region to another, and a free riding mentality that disavows security, military protection and border control.

An article in the Post today confirms that the seas, the Great Lakes and the St. Lawrence are all undefended and easy prey for terrorist attacks.

Where is the moral goodness in such a set of policies ?

Yes Canada is an ok place to live. It could and should be better, and has LOTS of work to do to reform itself.

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On a PPP basis Canada's per capita GDP is U$21 K vs. $34 K for the USA.

Actually Canada's GDP per capita in USD is $29.3k vs America's $34k. And that doesn't take into account the massive inaqualities in wealth distribution in America. Take away the top 10% and you'd likely find Canada's GDP per capita above that of America's

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Your numbers are wrong. Economist world in numbers 2003, CD Howe Institute and others have quoted U$21 K. You are quoting C$ 29K which one year ago would be equivalent to U$21 k. As for income equality, 50 % of the bottom income earners in the US pay only 10 % of the taxes. In Canada it is 4 %. Income disparity is not a problem in and of itself. Investment capital, jobs, innovation and demand side spend depend on it.

Outline in detail why a socialist, everyone receives the same wage society is better, wealthier and more prone to moral and economic success than a capitalist country.

You can't.

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Those are some great posts Craig. Purchasing Power Parity is the only true measure for cost of living comparisons between different regions, nationally or internationally. One thing I did find interesting about the long list in the UN study: all of them are democratic republics while none of the states listed include aristocracies, communist regimes (except China, although Hong Kong is included), Monarchies, Islamic states, or any other form of dictatorship. There is a direct correlation between liberty and economic prosperity.

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It would seem you're getting incorrect numbers, I've checked with numerous sources from the OECD and Canadian and American goverment sites. All comes out with Canada having a GDP per capita of $29,300 in USD. And with America having a GDP per capita of $34,000 in USD. As a said before this doesn't take into account the massive wealth inaqualities of America.

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Just to elaborate on Craig's post:

The top 10% of wage earners in the US pay 50% of a ferderal income taxes.

The Top 1% of wage earners pay nearly 10% of all federal income taxes.

This doesn't even include factors such as death tax and capital gains tax, both of which constitute double taxation. Furthermore, if you think the top 10% is made up mostly of millionaires, you're wrong. A duel income household with combined annual earnings of just $96,000 falls within the top 10% of wage earners. The way I see it, the "rich" are already paying more than their fair share in taxes. In addition, there are millions of Americans who don't pay any income taxes at all.

We don't want a system of blatent income redistribution here in America. Its bad for business as they say. Like Canada, California is also on the verge of being transformed into a proto-Marxist state (i.e. out of control taxation and spending, pseudo one party system, etc.) We'd like to beat back the flames of hell in that state if you don't mind. (no pun intended)

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Right, you are right on. In Canada rich is defined in Ontario at above $60 K per annum income for a single income earner. In the US the highest tax rate kicks in at above U$290K per annum. In Canada it is US $90 K.

This is ridiculous.

In Canada you are not incentivised to work, if you do, you lose your money. The 'progressive' income tax levels are really regressive. People find ways in both personal and business affairs to move money around and avoid the higher tax bracket. Under the table, shell companies, and moving money between companies is the result.

A flat tax is better. Case in point - Russia [not a democracy, but a one man Stalinist regime still apparently] had a progressive tax structure in the 90s and it failed. Putin put in a flat tax of 13 % and revenues are up over 35 %.

Flat tax is the only fair tax and let each make and keep what is lawfully and morally theirs. This redistribution of money by 3-4 levels of gov't is immoral, unsustainable and a massive drain on wealth.

And btw PPP for Canada is about now due to the currency revaluation about U$24k. Take the GDP for Canada which is about $750 Billion US divide by the population of say 32 millions and you have about 24 K US per capita income. The OECD has a PPP algorithm that can be used and the $24 K might move up or down depending on the variables in this calculation. According to the Economist in 2002 it was about $21 K.

But let's say it is $25 or 26 K per capita. It still does not make a difference to the core argument I am making. Currently US GDP/capita is slightly above $37 K US. Let's even revise that down to $35 K. It is still quite a Gap, and the Gap keeps growing not shrinking if you look at it historically.

Canada is actually 10 YEARS behind the US on a PPP basis. This means the US achieved our PPP ten years ago !!

And Canadians tell me their standard of living is higher ? [it is not, it is now 75 % of the US level and dropping].

Ah but still let's Rah Rah Rah !! [Don't forget to mention socialised medicine as the key factor of being Canadian. This was er one of the main points of Hitler's National Socialism as well. See the Nazi Charter of 1935, free health care, free education, forced full employment...more living space.]

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Flat tax is the only fair tax and let each make and keep what is lawfully and morally theirs.

I do agree, Craig, well said. A flat tax rate is the only equitable system. Graduated taxation basically penalises success and high earning. The Canadian economy will not pick up if it cannot encourage entrepreneurship and investment, and no entrepreneurs will come here to get fleeced, and nobody can invest anything because the government has already taken their money and "invested" it in worthless feel-good boondoggles.

The taxation situation in Canada is sickening anyway. I pay a fortune in taxes: income tax on everything I earn, and then GST/PST on everything I spend! What do I get for this money? A 26th-rate military, no border security, illegal immigrants everywhere but where Immigration Canada can find them, a run-down and useless healthcare system, a marginalised police force powerless to stop a spiralling crime rate - where's the beef?

And another thing: what gives MPs the right to keep voting themselves endless salary increases? To my mind, salary increases are a reward for excellent performance. In my life, every time I got a salary increase, it was for gaining a skill or showing exemplary performance. Canadian MPs are doing a terrible job of running the country. If they were my employees I'd fire them all, not give them raises.

Now if US senators gave themselves a pay increase, that is more justifiable, really: the economy is booming, the war on terror is being won, and their performance has been good so far. But what have Canadian MPs done to deserve massive raises?

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