Quote:
Originally Posted by Iowa_Flames_Fan
Alberta has a flat tax, so it's unlikely you'd ever pay more than 35% of your income in tax--though that doesn't include CPP.
One thing I didn't include was state Unemployment Insurance, and I made what turns out to be a very modest assumption of 5% State Income tax. Some state payroll tax premiums can be as high as 6.5%, though most are quite a bit lower. State income tax can also be as high as 10%, though I think around 5 is more the norm.
The thing is that Health Insurance costs aren't indexed to income--their variation depends on other factors, such as where you live, your group benefits plan, etc. So as your income rises, health care costs as a percentage of income will drop.
I used 50,000 dollars for one simple reason: it's the median household income in the U.S. The median household income in Canada is higher--it was 66,000 dollars in 2006, so perhaps I should have assumed that for Canada--though I doubt it would make much difference, especially in Alberta.
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The point I was trying to make is that after deductions, which are much greater in the US, most Americans are paying more like in the mid 20% income tax at most. Alberta is not a great example to compaer either, as their budget is highly subsidized with oil money.
Your point stands though that someone making 40-50,000 a year or less is going to pay a much higher percentage of their income to health care, than someone making 200k in the US. Someone making 200k in the US is paying a lot less towards health care than someone making the same in Canada.
EDIT: I don't pay any state payroll taxes, btw.
I do think my point stands that I'd be paying at least 10% of my income more to taxes(inc health care) even in Alberta than I am paying in Virginia.