Comment by jogjayr | Hacker News Reader

Comment by jogjayr | Hacker News Reader

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Marginal tax rates can be misleading, especially because (as the linked article itself states) they apply to different levels of income.

Effective tax rates provide a clearer picture. Let's take one example.

I plugged in $200k (CAD 270k, admittedly quite high for Ontario) of income to a California[1] and Ontario[2] tax calculator.

For California, I used the following: "Filing status - Single, 401k deductions - $19k". Effective tax rate: 30%.

For Ontario, I assumed CAD 26.5k in RRSP deductions. Effective tax rate: 35%.

> cost of real estate/rent in Toronto or Vancouver is not significantly cheaper than SF

Buying isn't cheaper. Renting is still significantly cheaper (at least by 1/3).

> salaries are lower

This is true.

> cost of living expenses...are higher

Cellphones and internet, yes. Everything else (yes, even milk and dairy products if you shop at Costco) is comparable to US prices.

> you're still going to want to carry supplemental health insurance

Most employers provide this. And vision/dental is far cheaper than paying for everything.

I'm not saying you'll end up with more money if you live in Canada. I just want to point out that many of the fears of "higher taxes" and "higher CoL" may be a bit overblown.

1. https://smartasset.com/taxes/california-tax-calculator

2. https://simpletax.ca/calculator

Dude I live in Canada lol.

5% of 270k CAD/200k USD is 10k USD. That's not an insignificant amount of money.

Sales tax is higher here, 13% in Ontario vs ~7% in CA (varies by county or something weird).

Things really are more expensive. Grab any book off your shelf and look at the Canadian and American MSRP, notice how it's still more expensive in Canada after accounting for currency conversion. Gas is more expensive. Alcohol and cigarettes are more expensive. The list goes on and on.

Off the top of my head the only things I can think of that I know to be cheaper in Canada are maple syrup, propane and lumber.

>Most employers provide this. And vision/dental is far cheaper than paying for everything.

Most employers provide it in the states as well, but it's still money they spend on you instead of paying to you. Insurance needs to cover less here, but it is needed for much more than vision and dental. The biggest one I can think of would be prescription medications, there are more but I don't feel like grabbing a policy book off my shelf.

>Buying isn't cheaper. Renting is still significantly cheaper (at least by 1/3).

I haven't gone into any great detail verifying this but I doubt it is true. What cities and neighbourhoods were you comparing?

Again I love my country but moving to a major Canadian city from a major American as a way to save money is a foolish idea.

> moving to a major Canadian city from a major American as a way to save money is a foolish idea.

Please read my entire comment again. I did write "I'm not saying you'll end up with more money if you live in Canada."

But people hear "Canada has higher taxes" and assume it's like 20+ percentage points higher, not 5 percentage points higher.

> Gas is more expensive.

Not really. It's the equivalent of USD 2.81/gal at a Toronto Costco[1]. It's $2.75 at the Sunnyvale Costco (cheapest gasoline) right now.[2]

> What cities and neighbourhoods were you comparing?

2 bedroom in Downtown Vancouver - $3250 (presumably CAD, which is ~USD 2400)[3]

2 bedroom in Mountain View - $3600 [4]

Same thing for Toronto.

> Alcohol and cigarettes are more expensive

Uh...don't smoke? It's expensive for your health too :-P. Yeah Ontario and BC liquor laws seem to be stuck in the 1940s sadly. But alcohol isn't usually a major component of most folks' household spending, so it's hardly a budget-killer.

1. https://www.gasbuddy.com/Station/130688

2. https://www.costco.com/warehouse-locations/sunnyvale-ca-423....

3. https://www.padmapper.com/apartments/vancouver-bc/downtown-v...

4. https://www.padmapper.com/apartments/mountain-view-ca

>2 bedroom in Downtown Vancouver - $3250 (presumably CAD, which is ~USD 2400)[3]

This is one of those instances where things get lost in statistics without local knowledge. West Vancouver (part of downtown) is a very nice area a person who makes 200k USD would be happy to live. The Downtown Eastside (also a part of downtown), a short walk from West Vancouver, is littered with used 'insulin' needles, aggressive panhandlers and crime. Mountain View is a suburb (70k pop), Vancouver (700k pop) is the hub the suburbs extend from.

>Not really. It's the equivalent of USD 2.81/gal at a Toronto Costco[1]. It's $2.75 at the Sunnyvale Costco (cheapest gasoline) right now.[2]

Trust me man, gas is more expensive. Look at averages, not the lowest available price at any given time. There are times when you get lucky but overall it is more expensive. The divide gets larger when the commodity price of oil is higher (unlike right now).

Ok, then Burnaby[1]. I visited Vancouver last year, and stayed there. It's quite nice, also a suburb, and a short train ride into Vancouver. You can have a 2-bedroom for CAD 2900.

I think you're underestimating how insanely expensive renting in the Bay Area is.

> Look at averages, not the lowest available price at any given time.

I compared prices from the same outlet (Costco) in different locations. That's as apples-to-apples as you can get.

I made two visits to Canada last year, and bought gas at random (non-Costco) outlets. At no point did it feel significantly more expensive than California prices - I converted in my head every time I filled up.

Gas is extremely cheap in Texas, compared to California (and also Canada).

1. https://www.padmapper.com/apartments/burnaby-bc

> I made two visits to Canada last year, and bought gas at random outlets. At no point did it feel significantly more expensive than California prices - I converted in my head every time I filled up.

This is another point. Canada is a huge place, where gas prices vary wildly even within provinces. Gas in north Ontario is often much more expensive than south. Sometimes the price in St. Catherines is 20 cents cheaper than gas in the GTA because of the 'gas wars' their stations are famous for.

> I compared prices from the same outlet: Costco. That's as apples-to-apples as you can get.

You can cherry pick information to say whatever you want. You compared a single daily station price in Vancouver to a single daily station price in CA. Costco also requires a membership and they use cheap gas to lure people in, it's not a traditional gas station (though I may look into a membership now...). This is also a time in history when gas is unusually cheap. I suggest you look at averages. There is good reason for the price difference. Although Canada produces a lot of crude, we refine almost none of it so we import pretty much all of the finished product.

That money you're saving on the apartment in Vancouver vs Mountain View basically works out to that 10k USD extra you would spend on tax you worked out earlier as well (but of course you would not make anywhere close to the same salary in Vancouver or Toronto).

If you want to move to Canada I encourage you to do so, it seems like you would be happy if you did. But to go back to my original point, if you move to a major Canadian city from a major American one with purely financial motivations, you will be sorely disappointed.

Also I wanted to work this in somewhere: https://xkcd.com/180/

> if you move to a major Canadian city from a major American one with purely financial motivations, you will be sorely disappointed.

I think I've already acknowledged this.

> If you want to move to Canada I encourage you to do so,

Don't be so sure I won't. We should hang out then, since we both like arguing about inconsequential stuff online for way longer than is healthy :-P

> Don't be so sure I won't. We should hang out then, since we both like arguing about inconsequential stuff online for way longer than is healthy :-P

Lol, I meant that sincerely. You should do it if it's what you want to do. Life is short, if you want something don't wait. If not now, when. Cheers buddy.

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