I am an Italian American born of immigrant parents, who came to America from Sicily in 1928. Changing their lives for themselves and future generations is something I am grateful for. Now when we travel back to Italy it is just for fun.
My wife is Canadian and from a large Nova Scotia family. She lives here in the USA with our family, but we travel back and forth across the border. Naturally, we all compare notes about life, family, and of course money.
Lately, the stories about the Canadian system of taxation are getting some press due to our current health care, economic and education crises. While discussing this with my brother in law, we came up with a useful comparison of total life taxation based on earning the same amount in the USA and Canada.
He owns a business and has 2 kids.
I own a business and have 2 kids.
He just buried his parents as I have.
My brother in law has a child born with a serious lifetime sickness that has required many hours of specialist care. They never feared the inability to pay for her care.
That has no price tag, as a parent we consider this priceless.
My wife and I both work.
Both my brother and sister in law work.
In Canada, there is 6 months of maternity and paternity leave, so they had 2 years off when their kids came along. My childcare cost for 2 years in the states was about $ 60,000 total (1), and we are lucky it was just for 2 years Many families in the US need childcare for longer.
All our children got their college educations at great schools. My children paid tuitions of about $ 400,000 total.
His tuition cost was about $ 20,000 each or $ 40,000 total for 2 children.
This means I spent $ 360,000 more (2).
For my business, I pay the medical insurance for my 16 employees, which is about $ 120,000 per year.
He pays zero.
I have paid $ 3,600,000 in 30 years (3).
My parents both ended up in long term nursing care and used up all their assets.
His parents ended up in long term care and the state did NOT take all their assets.
All the grandparents were not wealthy. His grandparents were able to leave $ 300,000 to their grandkids, while mine could not (4).
For the same income of $ 200,000 annually, over our 30-year work lives, I have paid 10% less in taxes every year.
This means he has paid $ 600,000 more in taxes ($ 20,000 per year for 30 years).
Here is the math:
For his EXTRA $ 600,000 in taxes what did he get?
He did not pay:
- $ 60,000 in childcare
- $ 360,000 in higher education
- $ 3,600,000 in health are costs, including his own
- $ 300,000 gifted to his children
The total is $ 4,320,000 in benefits, so it looks like he is $ 3,600,000 ahead of me.
So yes, Canadian math makes me jealous.