Context for non-Canadians: income above CAD$220K has a marginal tax rate around 53% in Ontario [0]. It's similar in other provinces.

[0] https://www.taxtips.ca/taxrates/on.htm

To be fair, if you live in California and make $220K/yr, your marginal tax rate on salary is 46% (35% federal + 9.3% state + 1.45% medicare)

Your tax rate is actually around 57% because you forgot to include your medical insurance of around 11% at that salary for a family of 5. Roughly $2,000/month. If you are comparing tax rates with first world countries you need to include your health insurance costs or the results will be skewed.

Luckily with a salary in the top 2% nationally you can afford insurance. The same can not be said of people who are not rich.

I agree that health care is very expensive, but you may be overestimating a bit... I looked up some plans on California's exchange for a hypothetical family of 5, and all except for the "platinum" tier were between $1200/mo and $1600/mo -- so 6% to 9% in this particular example.

With a lower income, the percentage would increase -- but only up to a point since a family of 5 starts qualifying for ACA subsidies if their income is less than $120K.

The subsidies make a big difference -- 84% of people who purchase insurance through the exchanges receive a subsidy and the average monthly cost of a plan after taking subsidies into account is $145 (vs $595 without) [1].

[1] https://www.healthinsurance.org/obamacare/will-you-receive-a...

Why would you choose family of 5 as your point of reference? That’s very uncommon in tech-California.

Your math is bad, and you're using a nonstandard set of numbers.

Generally in CA, and most of the US, you would receive health insurance through your employer, and the bulk of your medical insurance premiums are non-taxable subsidies by the employer.

The insurance figure came from https://blueshieldcaplans.com/?marketcode=15WS10900

Like I said, your math is bad. You're using numbers from individual plans, not employer-sponsored plans. As individual plans are entirely separate pools from the employer-sponsored plan pools, the numbers aren't even remotely similar.

In all other first world countries it doesn't matter if you are self employed or work for a big company. Your healthcare is the same.

Is the health insurance cost a percentage of your income? I thought it is a fixed amount based on what the insurance is covering.

It's harder on the poor. The percentage figures will vary based on your income level. Luckily the OP chose an income level in the top 2% of all Americans which made it a somewhat reasonable level.

This was also an individual plan bought on a healthcare exchange. Large employers have a stronger negotiating position and can get somewhat better rates, but in the end you're still basically paying a tax and it is disingenuous to compare tax rates with countries that provide socialized healthcare with their taxes and not include the cost of healthcare coverage in the States.

It is not fair to compare taxes between countries with and without healthcare, but it is almost impossible to compare otherwise. For example USA has huge prices and excellent services compared to almost any other country, in my country (Romania, Europe) the socialized healthcare is so bad many people have a private insurance, I have 2 private insurances through my employer and I still pay out of the pocket about half of everything I get (100% of dental care is out of the pocket, most consultations are covered by the private plan, most treatments are out of the pocket).

Little bit of both. It's a fixed rate, but a lot of employers use a "tier" system where the rate depends on your income.

You're also forgetting social security, as well as your employer's contribution to medicare and social security (Which is the same as your own). They get deducted from your paycheque (In both Canada, and the US) before you even see it.

Which, for an income of $231,600/year ($11,600 of which get taken off your paycheque before you even see it), adds up to a total of $71,143.

Meanwhile in Ontario, your total tax burden, for an income of $223,750 ($3,754 of which gets taken off your paycheque before you even see it), adds up to... $88,663.

Of course, in California, your employer is also spending ~$20,000/year on your health insurance plan (And is asking you to pitch in ~$6,000).

In Ontario, at that income level the province will bill you... $900/year for a health premium. The rest of your health care costs[1] come out of the regular taxes you pay.

...And if we add all that to the math, you'll discover that the Canadian takes home a bigger portion of their paycheque then their American equivalent.

[1] Okay, I'm also missing vision and dental, which are part of the $20,000/year employer part of your health plan, but are not covered by the province of Ontario. The Canadian would have to pitch in a bit of cash for that.

Hm, I actually did the full pay calculation included payrolls a month ago for myself last year. Granted, I was in washington last year, but between federal income taxes, social security, and medicare mine was about 27% on 221k income as a single person with no kids and I'm including the employer payroll taxes as part of that income. Converting USD to CAD gets you 294,528 which has an average tax rate of 41.69% according to this website [0] and it doesn't include your payroll tax.

As for healthcare, vision, and dental for a single person with no kids my employer paid $8,800 for the year, I paid 150, I get to put $3,500 pretax income into a HSA for healthcare spending, and my max out of pocket spending is $2,600 so that's not really a concern for me.

[0]: https://simpletax.ca/calculator

Washington derives all of its tax revenue from things that don't appear on your paystub. Property taxes and sales taxes. Because it's not saddled with Prop 13, it can actually collect property taxes at its posted rates.

This does, however, mean that it has one of the most regressive tax regimes in the country.

If we are going into such detail then we also need to take into account differing currencies, cost of living, salary distribution, purchasing power parity, sales taxes, property taxes, tax credits, etc.

Just as an example, my salary in the US would be 30-40% higher and denominated in a currency that is worth 34% dollar for dollar.

Sales tax in Ontario is 13%, sales tax in Cali is 7%. Property tax in Toronto is 0.61%, property tax in San Francisco is 1.18% [1]. The net burden of these non-payroll taxes is pretty similar.

[1] Assuming you're one of those suckers that isn't laughing all the way to the bank, thanks to the mindboggling piece of legislature called 'Proposition 13'.

Marginal tax rate is a weird way to look at it when you list a specific salary. You should use the actual effective tax rate that person would pay, which is 34.8%, fico, state and federal.

It's helpful for people making high incomes, but yes, you're correct, it doesn't provide much clarity on the actual taxes paid.

At $220,000 CAD, the tax rate in BC (one of the lowest in Canada other than Alberta) would be 35.8%. In Quebec, it would be 42%.

Tax rate is 42% for all income above 55,960 Euros in Germany. That doesn't even include a few other taxes you might likely have to pay.

Top tax bracket for the income tax portion is 45%.

But I assume housing is more affordable than the $2 million houses in Silicon Valley.

Wages in Germany are much lower. Owning a home in a city like Berlin doesn't seem a lot easier than in SF. People are fine doing long term rentals with rent control.

Not everything is about Silicon Valley. You can move away to afford better housing. That's what I did.

Plus a 9% sales tax, and high property taxes if you bought in recently.

California property taxes aren’t that high, even for new owners compared to other states.

In this case the relevant metric is property tax as a percentage of income rather than as a percentage of property value. On average, California is somewhere around 15th in the nation, but there's a sharp divide between new owners and grandfathered owners.

also, as ever, we have to note, since so many people do not understand it, you do NOT pay 35% federal tax on your income, you only pay 35% of your income above a certain level.

Marginal tax rate (which is specified) is at least how much you'd owe on every dollar of income after. Average tax rate is how much tax you actually paid against income.

Most people (particularly in the US) do not understand this. In addition, the actual placement of the tax makes a great deal of difference. Owing 35% on income above $35k is very different than owing 35% on income above $220k. Very people know where the tax brackets are.

Indeed. If you have 4 kids in BC, your effective marginal tax rate could be as high as 33% (Federal) + 20.5% (BC) + 1.95% (BC health tax) + 3.0% (pharmacare deductible) + 9.5% (Canada child benefit clawback) = 67.95%.

except it's impossible to simultaneously pay those rates on a marginal basis. according to https://www2.gov.bc.ca/gov/content/taxes/income-taxes/person..., the 20.5% rate only applies to income over $220,000 (which, even by US standards is in the top 3%), while according to https://www.canada.ca/en/revenue-agency/services/child-famil..., the CCB clawback only applies between $31,712 and $68,707. therefore, while you can simultaneously pay all these taxes, I don't think it's accurate to call it a marginal rate.

The CCB clawback between $31,712 and $68,707 of income is at a higher rate (23% if you have 4+ kids). Above $68,707 the clawback is the 9.5% I quoted.

sorry, I was on mobile and didn't check closely enough. it's worth noting that the maximum clawback is 100%, so in order to have any benefit to claw back at $220k, you would need to have at least four children under 18 years of age. if we assume that of the BC families receiving at least $1 in CCB, the probabilities of having four or more children and earning over $200k are uncorrelated (I would hazard a guess that the actual correlation is almost certainly negative), then the number of families paying 20.5% provincial income tax and 9.5% clawback is probably around 52.

in order to also be paying the 3% pharmacare deductible, you'd also need to be spending at least $7k per year on medical expenses, as well as making less than $316k before taxes. on the whole, I would say that paying that much medical expenses would make someone disinclined to have (more) children.

in conclusion, while I was wrong to say that it's impossible to pay all those taxes simultaneously and marginally, it seems highly unlikely and I doubt that anybody in BC actually pays that marginal rate.

https://www.canada.ca/en/revenue-agency/programs/about-canad...

Effective Tax rate and Marginal Tax rates are two different things.