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The Price Of Doing Business
8127972 writes: "It seems that a ton of high tech companies are leaving cities (like San Fran) with high costs of doing business for cheaper cities (Washington DC is mentioned due to new government spending) or even cities in Canada. Sounds like American high tech workers are going to have to learn to say the word "eh?" a lot."
Next if US'ers moves here they'll be paid in Canadian dollars. While you'll live well in Canada it's a big pay cut from the US, especially when you add taxes on top. Furthermore prices in Canadian cities have started to rise and while they don't compare to NYC, Boston or SF they're still shocking the natives and expensive in local terms.
Finally there are the cultural differences. While visiting Toronto or Vancouver may feel very familiar to a US'er that changes when you actually live here (Montreal is immediately obvious as being different.) There're the little things like brands being different, everyone being that one notch politer, and Curling being a real sport. There's also a dearth of ghastly evening news (you'd think Canadians are the world's worst drivers from watching TV news until you realize there aren't as many shootings and other violent incidents for the if-it-bleeds-it-leads stories) and lots more interest in international events.
However there are even more important differences. One is the Quebec issue. This is where I live but it comes up everywhere across the nation: French language laws, government policies, separatism, and the economic shock-waves every time Quebec threatens to leave.
Other significant differences:
- Little separation of Church & State with things like religious lessons in schools.
- However by-and-large Canada is more liberal then the US and does have far fewer of the extreme right-wing biblethumpers.
- Canada doesn't place individual liberties above all else; the general good is at least as important.
- The Provinces are stronger politically then US States and there's a lot more Federal/Provincial jostling.
- Strong social policies often more in line with European models then US.
- Political parties that don't map at all onto the US model.
- Socialized Medicine (services are generally good in spite of the horror stories often heard in the States.)
- Establishing credit across the border can be difficult, sometimes very difficult.
- Lots of technology comes out later in Canada (wireless Palms) or not at all (TiVo.)
- While Canadians get US TV & somewhat radio there are lots of programs, acts, and personalities that are big in Canada but unheard of in the US. Some are programs like "This Hour Has 22 Minutes" and others are bands that make Top-10 in Canada but never rise above Top 500 in the US.
No, I like living in Canada a lot, and US friends love visiting, but ask any US expat. living in Canada and they'll tell you it is different and it's more then the good beer.I don't read ACs: If a post isn't worth so much as a nom de plume to its author then I wont bother either.
According to Ernst & Young Canada Tax Calculator, marginal rates in most provinces top out at around 40-50%.
If you're in CA (California) and making $US 75K, you're paying a marginal federal rate of 27%, plus 9.3% state taxes (on everything over $30000), plus 6.3% for the SS pyramid scheme (up to $86000 and increasing by 5% per year), plus another 1.5% for medicare taxes. Works out to a marginal rate of about 45%.
If you're in .ca (Canada) and making $CAD 75K, you've stopped paying into CPP (the Canadian version of the SS pyramid scheme) and EI (unemployment insurance) after C$35K or so. The marginal rates aren't really any different.
Of course, a $CAD is worth about $0.63 US, so your C$80K is only $50K. But the cost of living is much lower.
Got investments? Canada taxes capital gains at only half the marginal rates, and has no long-term vs. short-term rate difference. (In the US, you have to hold it for a year to qualify for the 20% "long-term" federal rate, and in CA, you're still paying that 9.3% CA income tax on it. So your long-term capital gains in California are taxed at 29.3%, and your short-term trades are at 40%. In Canada, all trades are taxed at about 20%.)
GST/PST? OK, compare 15% vs. 8.25%. But how much do you spend, vs. how much do you save? The better-off you are, the less a consumption tax hits you.
And if you have kids, what do you get for your money? In the US, you pretty much need a private school and university education costs are about double. And you have to pay for your own medical insurance. In Canada, the health care for Bad Stuff (cancer, etc) sucks ass, but for 90% of the population that only has to deal with colds, flu, and the occasional broken bone, it seems pretty good.
Bottom line - The US may be tax-competitive for an individual, but California sure as fuck ain't.
Well, actually, the HomeFair calculator does take the most important things into account, just not perfectly. It's using what's called a "cost of living index," which compares different categories of costs--rent, utilities, health care, etc.--and making the calculation based on that.
No, it's not precise--by necessity it's using average COL values, presuming you are paying the median in all its values for everything. But it's not a bad ballpark estimate. Vacations and mail-order computers are not your most significant reoccuring expenses, are they? The most significant expense for nearly anyone is housing, followed (roughly) by utilities, transportation and local taxes. If I moved from Tampa to Santa Clara, the fact that a Titanium PowerBook is the same price in both places is immaterial. The fact that my $650/mo apartment here is an $1800/mo apartment there is very material... and that's the sort of thing that salary calculators do take into account.