Quote:
Originally Posted by Mutt
I already stated in the other thread that Canada is a better place to be if you are poor OR lower middle class and 40-50K a year is lower middle class.
Americans who make 40K or less I believe pay NO income tax.
And you're wrong about the top marginal income tax rate in Canada - it is 50%. You must be mixing up average tax rate and marginal tax rate.
Financially the US is better place to be IF you are moderately successful - and IF you are moderately successful that means you can afford decent medical insurance and you will get better/faster treatment in the US.
The differences in the two countries is closing - the US is becoming Canada 2. Healthcare reform will inevitably end up with a single payer system like Canada's, eventually there will be a national sales tax like the GST and VAT taxes in Europe.
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Just a couple of things.
The US Census Bureau says that the average household in America is comprised of 2 adults and 2 kids and they have an average income of $51K per year. This means that $50K is not the lower end of the middle class, it is the heart of the middle class. This is part of the reason the middle class is going bankrupt. The US Census Bureau also says $20,600 to $102,000 is considered the range for middle class.
As for those making $40K paying no taxes. That all depends. A person with two kids and a house that they can write off will likely only pay the 7% social security tax and not much else. A single guy who rents an apartment and has no write offs will end up paying somewhere between 10-12% to federal (this includes social security tax) and then more for state tax unless they live in a state that has no income tax.
So they don't pay a ton, but between federal and state you could easily end up paying 14-18% of your income in taxes if you make $40K.