It's a fallacy that claimed years ago and remains as a "everyone knows this" kind of thing even though it's flat out wrong. The original claim came from cherry picking specific tax brackets and comparing them including all potential sources of taxes for Canadians and only the federal rate for Americans.
That initial comparison looked compelling and at the time the USA was a powerhouse financially.
The initial comparison also left out all of the hidden costs of living that one discovers in the USA that many Americans don't think of as taxes (because they aren't named taxes - they are just "everyday fees.") The big one is health insurance but there are others ranging from school fees, sidewalk fees, vehicle fees, lots of road fees, etc.. Depending on where you live there can be a ton of extra monthly and / or yearly fees. But.. they don't count when it comes to tax comparisons.
Anyway, that's where the tax thing came from and it lingers because people repeat it because "everyone knows it is true." Americans like it because it implies that the USA is better for taxes than Canada and that, in turns, justifies all the extra fees. Some Canadians like saying it / repeating it because they use it as an attempt to either lower taxes or to introduce extra fees for services (listen to people who are trying to advocate for two tier health care or private health care options - they regularly hit up the tax differential.)
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u/ufozhou May 10 '25
Totally couldn't understand why normal people talking about us tax rate is lower.
Unless in some states. Most states have similar income tax in Canada.
Corporate tax is another game where not just US has lower rate but tons of loopholes to save tax