Wednesday, April 13, 2011

Do Canadians really pay more taxes than Americans?

A common belief among many Canadians is that they pay more in income tax than their American counterparts. Even politicians in Parliament have used this statement to press for lowering taxes. But, is it really true?

The answer is more complex than you might think. Statistical gathering agencies in both countries publish averages of income taxes paid, but comparing the two numbers is like comparing the stats of a hockey player with those of a basketball player. The numbers are based on different premises and include different pieces.

Using an average is also problematic as the very poor and the very rich skew it on both ends. In general, lower income Canadians pay less in tax for the services they receive and rich Americans are better off than rich Canadians. Here's a breakdown of the relevant tax components and their contribution to the overall tax picture.

http://money.ca.msn.com/savings-debt/gallery/investopedia/gallery.aspx?cp-documentid=28358234


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