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my canadian brothers!!! how does your tax system compare to us?

is it better to be an ultra rich american or canadian?

as a canadian can you invest in any american stocks or are you restricted to canada?

what are the best canadian broker accounts that have an international pressence?

also is there a cost to transferring assets domiciled in 1 country to another?

lastly what are the best tax haven for the ultra rich?

can a canadian open a vangaurd account?

I love my cheese. I got to have my cheddar.

Taxes. Obviously we can’t compare Toronto to Des Moines nor can we compare NY with Halifax. Broadly, from a tax perspective (including health care), Canada is better for anyone with an income below US$100,000 and worse for anyone with an income over US$100,000. that figure may be off by US$20,000 but gives you a good idea of better or worse.

Domicile of investment. We can invest in anything you can invest in.

Brokers. TD Bank and Raymond James are the only Cdn brokers with international presence. HSBC might have similar capabilities internationally but their platform sucks to my knowledge.

Transfer between brokers. No different than in the US. The receiving firm compensates the delivering firm for the cost of transfer.

Best tax haven. Likely Bahamas but not my expertise.

Vanguard. We have Vanguard ETFs but no platform to invest with Vanguard yet.

this article right? https://www.tsinetwork.ca/daily-advice/dividend-stocks/dividends-taxed-c...

how does your capital gains tax system work? i read an article that said it was like 50% of capital gains is taxed at the marginal ordinary income rate of whatever tax bracket you are in.

How are divs and itnerest rates taxed? divs are taxed similarly but interest rates are taxed at 50% of whatever interest (harsh)

lastly is there no estate tax in canada?

also what is the deductibility like, are they more lenient than the us or restrictive. with respect to say real estate or business expense or offsetting it with passive income/loss?

I love my cheese. I got to have my cheddar.

Those rates are not too different from the US, where you will pay more or less 30% in federal and SALT for capital gains and probably close to 50% in interest income at the highest marginal rates. 

“Visit the Water Cooler forum on Analyst Forum. It is the best forum.”
- Everyone

We can’t get you to travel past Big Bear, Vegas, and Aspen!!! Why do you have the hotz for Canada all of a sudden???

And mortgage interest is NOT deductible up here.  broken heart

“Mmmmmm, something…” - H. Simpson

Nerdyblop wrote:

this article right? https://www.tsinetwork.ca/daily-advice/dividend-stocks/dividends-taxed-c...

how does your capital gains tax system work? i read an article that said it was like 50% of capital gains is taxed at the marginal ordinary income rate of whatever tax bracket you are in.

How are divs and itnerest rates taxed? divs are taxed similarly but interest rates are taxed at 50% of whatever interest (harsh)

lastly is there no estate tax in canada?

also what is the deductibility like, are they more lenient than the us or restrictive. with respect to say real estate or business expense or offsetting it with passive income/loss?

we have dividend tax credits that make the taxation of dividends strange. the first ~$40k in dividends (assuming it’s your only source of income) is taxed at a negative rate, while the next $40k is taxed at low single digits. the outcome is that the first $80k in dividend income (assuming it’s your only source of income) is tax-free. the dividend rate tops out at 40% in most provinces at income above ~$200k.

capital gains are taxed at half the interest income rate. therefore they generally top out in the mid-to-high 20s across the provinces.

interest is taxed like employment income. tops out in the mid-50s in most provinces but only above $200k.

no estate tax in canada but our retirement accounts (e.g. RRSPs, RRIFs) are taxable at death. so in canada if you die with $500k in your retirement account, you have to take $500k into income at death, resulting in an effective tax rate of close to 50%. in the us, you guys can pass it onto heirs, bypassing this type of seizure. imo, this is a main reason why wealth accumulates at the top much easier in the US versus Canada over generations.

deductions are similar between the countries. like dude said, no mortgage interest writeoff here but we do get to fully write-off gains related to our principal residence so that can add up if you have pricey digs that go up in value a lot. we can’t writeoff cap losses against ordinary income. real estate and business expense deductions are similar to my knowledge.

As an American who lives overseas most of the time, the US is the worst tax system. US is the only country that taxes global income which is an invasive scam.  Canada doesn’t tax global income, so best tax domicile is a very different thing for American and Canadian.  Canadian can live in no tax place like Dubai or low tax place like Hong Kong…if tax avoidance is the only goal.

just fyi. canadians are taxed on worldwide income. they just get a credit if they are taxed by the locals. which is exactly like the us with some countries!

https://turbotax.intuit.ca/tips/canadas-foreign-income-tax-credit-6223

I love my cheese. I got to have my cheddar.

Nerdyblop wrote:

just fyi. canadians are taxed on worldwide income. they just get a credit if they are taxed by the locals. which is exactly like the us with some countries!

https://turbotax.intuit.ca/tips/canadas-foreign-income-tax-credit-6223

i think you may be misunderstanding.

americans are taxed by the IRS on worldwide income irrespective of residence. if an american is living abroad, two sets of taxes must be filed and tax credits are used to offset double taxation.

canadians are taxed by the CRA on worldwide income only if they reside in Canada on the last day, or for a majority, of the calendar year. if a canadian lives abroad, he generally does not need to file a canadian tax return.

To be fair, US is one of the only countries that can get away with such an oppressive regime. If Liberia or some hacksaw place tried to tax its citizens abroad, many more of them would probably try to give up their passports. 

“Visit the Water Cooler forum on Analyst Forum. It is the best forum.”
- Everyone

ohai wrote:

To be fair, US is one of the only countries that can get away with such an oppressive regime. If Liberia or some hacksaw place tried to tax its citizens abroad, many more of them would probably try to give up their passports. 

Most of western Europe, Australia, NZ, Canada, Japan could probably get away with it…but they don’t.  The US gov and US state govs have a unique obsession with taxation.      

I heard that in Canada strippers can be fully naked at places with a full bar. Where I live they have to wear a g-string if there is alcohol served. To me that’s worth paying higher taxes. 

^ this is true. 

https://www.wealthprofessional.ca/market-talk/canadians-pay-more-income-...

interesting article out from the Fraser institute comparing U.S. and Canada income tax rates. They should compare gas and sin taxes, that would be really funny. 

^ an article written by an anti-tax organization that doesn’t include Canada’s much more liberal benefit/credit system.

including credits/benefits…

a senior couple pays absolutely no tax below $40,000 and is only taxed at 20% above that level. dividends are tax free above this level.

a family with two young kids pays absolutely no tax below $65,000 and is taxed at about ~35% above that level including tax plus benefit clawback.

both of these groups get free health care, something that isn’t discussed in the article. plus, the family basically has a guaranteed after-tax income of $32,000-$35,000, and higher if they lose jobs due to unemployment.

this is why articles about marginal tax rates are useless when talking about tax fairness and social equality. this is why canada is better for the average citizen. we don’t let our families fall into poverty. this is also why canada will not experience a housing crash to the same degree as the US. our social system protects against economic cycle induced fire sales.

^ I’m not sure about you but I certainly feel I pay way too much in income tax, while, as you point out many taxpayers below a certain income level pay $0 tax. Everybody should be paying at least a minimum amount of income tax, regardless of income level. 

my oversized family probably paid close to ~$50k in all tax types last year less credits. yeah its a big number but it pays for health care for a lot of people, kids’ school, roads, police, fire, snow clearing, all that other somewhat necessary crap.

if you’re a single dude who pays ~$85,000 on ~$200,000 income (actual numbers), yeah it probably feels like you’re paying too much. but you’re outnumbered, so you can give it up now or my kids and their malnourished friends will take it from you later, haha.

canada govt spent $340b for 37m people. so it cost 9k per person! so if we assume ur the only productive member with 5 other people in your household that are doing nothing! then you are coming up! if ur a single dude paying less than 9k in taxes, you are coming upl!

club coming up on a tuesday!

I love my cheese. I got to have my cheddar.

“Mmmmmm, something…” - H. Simpson

Nerdyblop wrote:

canada govt spent $340b for 37m people. so it cost 9k per person! so if we assume ur the only productive member with 5 other people in your household that are doing nothing! then you are coming up! if ur a single dude paying less than 9k in taxes, you are coming upl!

club coming up on a tuesday!

Ya…your in the ballpark there but I’m a family man as well. Add on the $0.45 per liter of gas tax and booze tax and its even higher. CAn you image if Americans were paying like an extra $1.50 or whatever per gallon in gas tax. They would loose their minds. 

i mean you can price what your talking about. its not as much as you think. consider a person fills up his tank a week. typically a car uses 20 gallons which is roughly 80 liters. so multiply that by 52 weeks and your tax and you get:

less than 2k in gas taxes.

I love my cheese. I got to have my cheddar.

Nerdyblop wrote:

i mean you can price what your talking about. its not as much as you think. consider a person fills up his tank a week. typically a car uses 20 gallons which is roughly 80 liters. so multiply that by 52 weeks and your tax and you get:

less than 2k in gas taxes.

So there is 4.546 liters in 1 imperial gallon. Right now on my gas buddy app the price per liter is $0.999 per liter, so let’s just call it a buck per liter. So I’m paying $4.54 for a gallon. What are you paying per gallon?

 so regular gas is about 3.2 in los agneles i think, so a difference of $1.3. i use 20 gallons per week or a 1000 per year. so $1300 in higher cost attributed to gas taxes.

I love my cheese. I got to have my cheddar.

^ ok great. Now let’s chat about booze tax. I would pay $45.50 for 28 bottles, on special right now. What’s that cost you, $15 at the local Walmart? (Ontario just recently approved beer and wine sales in select grocery stores…about time!)

full cycle though. right now i think i’m getting decent value for tax dollars due to large family. when i retire, i’ll be getting a steal compared to all the health care expenses i’ll accrue combined with very little tax paid.

the amounts i stated include all taxes - income, property, sales, gas, excise, everything.

Matt Likes Analysis wrote:

full cycle though. right now i think i’m getting decent value for tax dollars due to large family. when i retire, i’ll be getting a steal compared to all the health care expenses i’ll accrue combined with very little tax paid.

the amounts i stated include all taxes - income, property, sales, gas, excise, everything.

I’m just talking income tax. 

The issue that I have, (aside from turning 40 this year), is who knows what our health care system is going to look like in another 25 years. My wife is a health care professional, and, despite everyone’s perceptions about all the free health care we get, only some services are covered by the province. As our population gets older, its only going to put even more strain on these services- so where is the money going to come from? Raise taxes? Two tiered health care? Cut health care services? Cut services in other provincial areas to re-direct funding to health care? 

i hate how govt nit picks what and whom they should subsidize. they should just do ubi to all and have everyone decide where it would help them most.

anyways i always thought it was hilarious that the govt provides social security for old unproductive people, then proceed to prolong their lives even further with free healthcare. 

I love my cheese. I got to have my cheddar.

^ In Canada, our Old Age Security (OAS) - starts at age 65, is an income tested benefit, so if your net income is above ~ $75k per year, you have to repay 15 cents on each dollar above and caps out around $123k.  

Mike79 wrote:

Matt Likes Analysis wrote:

full cycle though. right now i think i’m getting decent value for tax dollars due to large family. when i retire, i’ll be getting a steal compared to all the health care expenses i’ll accrue combined with very little tax paid.

the amounts i stated include all taxes - income, property, sales, gas, excise, everything.

I’m just talking income tax. 

The issue that I have, (aside from turning 40 this year), is who knows what our health care system is going to look like in another 25 years. My wife is a health care professional, and, despite everyone’s perceptions about all the free health care we get, only some services are covered by the province. As our population gets older, its only going to put even more strain on these services- so where is the money going to come from? Raise taxes? Two tiered health care? Cut health care services? Cut services in other provincial areas to re-direct funding to health care? 

i’m sure it’ll evolve to be more like insurance. if you are relatively healthy and young (say 60 or younger), then if you come across cancer or any other high cost disease, the public system covers you. if you’re older, stuff like cancer will be covered but specialized surgery will be harder to come by. this already exists to an extent.

the cost of doctor visits and other run-of-the-mill procedures will be pushed onto the individual so as to encourage self-diagnosis for simple things. there is a good chance that virtual doctors pick up some steam and lower costs for basic ailments as well. why do i have to trek to the doctor and have an appointment with him face-to-face to get amoxicilin for the strep throat i know i have. can’t i just tell some doctor robot that my throat hurts, go to the clinic, self-test and get amoxicilin, saving the system hundreds? why can’t i take a picture of a rash and get a diagnosis from a robot and a prescription for topical cream? the robot is going to diagnose better anyway.