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Author: ChrisBuehler Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 736461  
Subject: Re: Canada shows the way Date: 11/23/2012 2:33 PM
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Canada wants to balance budget in 2015, may invest to grow economy

While spending cuts play a role, do you think the higher than US tax rates in Canada might also be a factor? More revenue helps to balance the budget.

You can read about Canadian income tax rates here:

http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html

High income earners (generally over about $132,000) play 29% to federal government and 10% (Alberta) or more to the province. So the overall income tax rate varies from 39% (Alberta) to 50% (Nova Scotia).

http://www.taxrates.cc/html/canada-tax-rates.html

Further, these tax rates apply to Canadian resident's worldwide income.

Then, there is a national value added tax, i.e. sales tax, and all provinces other than Alberta add a provincial value added tax. The three territories do not have a territorial sales tax. In Canada these are referred to as federal GST (Goods & Services Tax) and provincial PST (provincial sales tax). Some provinces combine the two into a HST (harmonized sales tax). The total sales tax ranges from a low of 5% (lowest - GST only) in Alberta, 10% (second lowest) in Saskatchewan, to 15.5% (highest) in Prince Edward Island.

http://en.wikipedia.org/wiki/Taxation_in_Canada#Sales_taxes

Also, there are federal and provincial/territorial payroll taxes.

What else will help Canada balance their budget? Less spending on defense. While the US spends 4.7% of GDP on defense, Canada spends 1.4% of GDP on defense.

So if one were to hold up Canada as an example of what the US should do, one would conclude that the US should cut spending - particularly defense spending - and increase taxes.

Chris

PS. Canadian also enjoy universal health coverage.
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