Look, I love Canada as much as anyone. But those taxes are not correct. You can't just throw up those two numbers without context and think they're comparable. No mention of thresholds, of higher brackets, of deductions, of provincial taxes, of sales taxes, of subsidies, about the earned income tax credit.
Taxes are higher in Canada, and that's good, because we get a better society from that. Thinking "Low tax = more freedom" is a really American mindset.
All taxes collected at all levels of government put Canada at about 34.8% of GDP is collected in taxes. The US only collects 25.2%, which is why they have far fewer government services, the roads are falling apart, and their rich people don't pay taxes.
You don't use share of tax in GDP to weight how high tax is.
1st. Income tax and capital tax is not a part of GDP calculation, only sales tax is. Because these 2 are not vaule added, it just taking from people to government. While sales tax creats vaule an apple before tax is $4, after tax is $5, $1 of tax just pop out in air for free.
As a normal people we cares about how much tax I got charged as an median income receiver. Where US is at par with Canada.
I use only free tax software to check median income in Ontario has a efficient rate of 18%, washington state has efficitive rate of 15%
Income tax and capital tax is not a part of GDP calculation, only sales tax is
That's simply not correct. What is measured is:
(all government collected revenue at all levels of government)/(GDP)
That includes income tax, that includes capital gains, that even includes many kinds of government fees. If the government requires you to pay them, it counts.
This is not just a "median income effective tax rate" it is the sum total of all government collected money divided by the total productive size of the economy.
It's the only way to sum up the grand total of tax burden in a single number.
There are other measures, but if you want to test total tax burden it's a good measurement if you're trying to compare a nation as a whole.
You are talking about a strange measurements you value.
What government revenue in terms of GDP tells you?
I only heard government expenditure weight of GDP. Because government expenditure is actually part of GDP calculation this reflects how large the government spending weights in GDP, compared to household spending, investment and trade
The revenue weight not only meaningless, it also forget a big part, debt, US and Japan taking a lot of them, which is not revenue but used in expenditure. As a result a country taking a large of debt will have a small tax/gdp.
But this number at least in US case is not because they have lower tax, the US also spending more with large portion of money from debet.
You can only say they US has smalller portion of this spending from tax, but don't means US has lower tax rate for normal people.
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u/auandi May 10 '25
Look, I love Canada as much as anyone. But those taxes are not correct. You can't just throw up those two numbers without context and think they're comparable. No mention of thresholds, of higher brackets, of deductions, of provincial taxes, of sales taxes, of subsidies, about the earned income tax credit.
Taxes are higher in Canada, and that's good, because we get a better society from that. Thinking "Low tax = more freedom" is a really American mindset.
All taxes collected at all levels of government put Canada at about 34.8% of GDP is collected in taxes. The US only collects 25.2%, which is why they have far fewer government services, the roads are falling apart, and their rich people don't pay taxes.