Hacker News new | ask | show | jobs
by Clobbersmith 3363 days ago
Taxes in California are comparable to taxes in Ontario.
2 comments

Not at all.

At ~170k USD (220k CAD) in Ontario, you'll be hitting the combined top marginal rate of 54%.

It's true that California+Federal will be within a couple points of that at their top marginal rate, but that's 1m+ in California and 400k+ federally. So you won't even be within spitting distance until 400k+.

In California at ~170k USD you'll only be paying a combined marginal rate of ~37%, which is a huge difference. The brackets are lower all the way up, so you pay way less overall even if you do hit 1m+. And although payroll taxes are a bit more in the US AFAIK, Canada has higher sales taxes and lots of other hidden costs (e.g. much higher gas tax, more expensive consumer goods due to import duties, etc.).

you'd have better argument with effective tax rate.
The effective rate is much lower, and I indicated as much:

> The brackets are lower all the way up, so you pay way less overall even if you do hit 1m+.

I'm not going to do the math for a specific example though, people should do that themselves.

State/Provincial income tax appear to be similar, yes. But Canadian federal tax is higher, and Ontario sales tax (HST) is a gag-inducing 13%. If you think Ontarioans are ok with that sales tax, just check out any outlet mall in Buffalo on a Saturday.

A more useful comparison would be the 'effective tax rate', which of course varies by individual situation but can be done for some archetypes. This would allow you to consider additional deductions such as the mortgage interest deduction, which shouldn't be underestimated.