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Old 12-16-2011, 10:10 AM   #21
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What's happening here? Old-timers on this forum keep disappearing!
Sounds like a great plot for a Sherlock Holmes mystery novel: "The Case of the Missing Posters"
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Old 12-16-2011, 11:51 AM   #22
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Federal is much better. My sisters will get 100% of their salaries for life after they reach age 55.
Hasn't Canada learned anything from the US?! Do they want to put themselves in the same situation we are currently in? How do you pay someone 100% of their salary for the remainder of their life and not bankrupt the country?
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Old 12-16-2011, 12:17 PM   #23
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There is some useful comparative tax information on the OECD website:

OECD Tax Database

Check out the Excel files in Section 3: Tax Burden on Wage Income.
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Old 12-16-2011, 12:47 PM   #24
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Sweet deal, eh?
Sweeeeeeeeeeeet!

That pension will certainly buy enough cookies to "shut that b*tch up.
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Old 12-16-2011, 12:52 PM   #25
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Hasn't Canada learned anything from the US?! Do they want to put themselves in the same situation we are currently in? How do you pay someone 100% of their salary for the remainder of their life and not bankrupt the country?
Looks like the answer is: take 40-50% of salary for 20-25 yrs and invest it; control health care costs; and don't spend a lot on national defense.
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Old 12-16-2011, 01:26 PM   #26
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Hasn't Canada learned anything from the US?! Do they want to put themselves in the same situation we are currently in? How do you pay someone 100% of their salary for the remainder of their life and not bankrupt the country?

It probably helps that we have a population that is 1/10th of the USA's and unemployment is not so bad.

The 100% is for federal workers who have 25 to 30 years in at the time of retirement. Very few people ever stay in a job that long. So, in the end, it's probably not so bad.
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Old 12-16-2011, 06:27 PM   #27
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There is some useful comparative tax information on the OECD website:

OECD Tax Database

Check out the Excel files in Section 3: Tax Burden on Wage Income.
Thanks. I just took a quick glance at that Excel sheet, the one that's called "All-in". The numbers for the US and Canada are not too far apart, compared to those high numbers for Belgium, Denmark, and Germany, for example.

Interesting! I have visited Canada many times, but of course as a short-term tourist would not truly know the living conditions there. Recently, just from reading blogs of Canadian RV'ers, saw many of them complaining of high cost of living due to taxes. Of course, we know many Canadians go down south of the border to obtain goods.

So, what gives?

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Looks like the answer is: take 40-50% of salary for 20-25 yrs and invest it; control health care costs; and don't spend a lot on national defense.
Don't know about giving up 1/2 of my pay , but your last 2 items may mean the US can learn something from Canada.
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Old 12-16-2011, 06:31 PM   #28
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Interesting! I have visited Canada many times, but of course as a short-term tourist, would not truly know the living conditions there. Recently, just from reading blogs of Canadian RV'ers, saw many of them complaining of high cost of living due to taxes. Of course, we know many Canadians go down south of the border to obtain goods.

So, what gives?
.
It all boils down to the 10% thing again - our population is 1/10th of yours, therefore goods are generally more expensive. A lot of Canadians who live near the border like to shop in the US because your goods are generally less expensive, there is far more variety and gas is a lot cheaper. Even if you get nailed at customs, it still comes out cheaper in the long run.
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Old 12-16-2011, 06:37 PM   #29
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Well, if goods are allowed to "flow freely", meaning no additional import taxes, the extra transportation cost to bring the goods up a few miles north should not be that much. Though the US has a larger population, many goods consumed here are also imported and not made here either.

I am no expert on commerce, but suspect tariff taxes got something to do with the higher cost in Canada. And Canada has plenty of things to export in exchange for the goods it needs. Doesn't Canada export oil to the US? Why is gasoline more expensive there?
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Old 12-16-2011, 07:10 PM   #30
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Well, if goods are allowed to "flow freely", meaning no additional import taxes, the extra transportation cost to bring the goods up a few miles north should not be that much. Though the US has a larger population, many goods consumed here are also imported and not made here either.

I am no expert on commerce, but suspect tariff taxes got something to do with the higher cost in Canada. And Canada has plenty of things to export in exchange for the goods it needs. Doesn't Canada export oil to the US? Why is gasoline more expensive there?
That is a very good question. For an answer, we'll have to look at the lovely parting gifts our politicians get when they leave office. The money sure as heck isn't going to improve our roads (they way they claim)
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Old 12-16-2011, 07:27 PM   #31
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I am no expert on commerce, but suspect tariff taxes got something to do with the higher cost in Canada. And Canada has plenty of things to export in exchange for the goods it needs. Doesn't Canada export oil to the US? Why is gasoline more expensive there?
Well, according to Wikipedia...

"Fuel prices have always been higher in Canada, even though Canada is a net exporter of energy. This is because Canada, unlike many oil producers, does not heavily subsidize fuel. Prices are based on the world market price."


Comparison of Canadian and American economies - Wikipedia, the free encyclopedia
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Old 12-17-2011, 04:21 AM   #32
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Very good Wiki article!

Here's what I gathered from scanning it.

* The average tax level for the average income in both countries may be the same, as shown in the OECD Excel sheet. However, the Canadian tax system appears to be more progressive.

* Sales tax, counting both national and provincial taxes, can be as high as 13% (gasp!), but the Wiki article talks about a GST rebate to reduce its regressive nature on the lower income class. And the article also mentions that Canadian government revenues depend more on sales tax than on income taxes, hence prices are higher. This is in contrast with the income tax brackets that I found earlier. Perhaps those income tax brackets are misleading if one does not consider deductions which lower the taxable income.

* Regarding health, "the U.S. Government spends as much on health care, 7% of GDP, as the Canadian government does, and total healthcare spending is much higher - 14.6% of GDP in the US vs. 10% in Canada.". Yet, "Canada ranks higher than the U.S. in statistics such as life expectancy (80.22 years in Canada versus 77.85 in the U.S.) and infant mortality (4.75 Canadian deaths per 1000 versus 6.50 in the States)." This of course is nothing new. It is well known that American health care system is not efficient compared to other developed countries.

* Canada does not run a trade deficit like the US does. So, Americans are enjoying cheap goods simply at the "generosity" of its trading partners such as China. Then, it means Canadians buying goods south of the border may not help the American economy, but only add to our trade deficit... Just joking, because it may not amount to much at all. I remember that Canada has very low limits on what its citizens can bring back. Well, other than a big tankful of fuel in their RV , but then I don't think we subsidize our fuel either.

* Regarding the higher gasoline price in Canada, I do not believe it should be subsidized. It's dumb for oil producing countries to allow its citizens to waste a valuable commodity which could be exchanged on the world market for other imported goods. Rather, I was suggesting that higher taxes were the cause. Just now remember reading somewhere that Canada exports crude, but imports refined gasoline. That could also explain the higher cost.

PS. In case anyone wonders about the late hour of this posting, I will add that I had a good nap before waking up in this wee hour to self-educate on this economic matter, wide awake.
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Old 12-17-2011, 09:57 AM   #33
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I spoke to our HR retirement advisor yesterday and found out that my plans to retire on September 1st would be stupid. I'd totally forgotten about the severance payouts (in my case about $50K).

If I retire at the end of the calendar year, that severance will be added to my annual income, which will bump me up on the tax ladder. I'm already paying 40% - this would take me to nearly 50% and would essentially wipe out half of the severance.

If I wait until January, my income drops by 40% (pension), the tax rate on that amount drops to 30% and the severance will only bring the tax rate up to about 40%.

Sigh..... sorry about the whine.
So it makes sense to wait four months, bit it's just another case of "one more year"...

If you're FI and comfortable by September, and can't stand to work until January, pull the plug. Pay a little more taxes on the severance, and then forget about it.

Of course, many of us couldn't stand to do that, understandably.

But if you were really prepared financially to go in Sept, getting an extra bonus you forgot about and paying some more taxes on it is then just a smaller bonus.
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Old 12-17-2011, 10:36 AM   #34
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Sorry for the topic drift, Nuiloa, and thanks to the previous poster for bringing it back.

By working 4 more months, you would gain a 10% on the severance pay of $50K, for another $5K. This is in addition to the difference between your pension and income during those 4 working months.

For people who are stressed out at their work, that would be a small penalty to pay. You, on the other hand, do not seem to be ready to go yet, and may just need another reason to hang on a little longer.

Tough, but nobody can decide for you. How early do you have to decide? Can you wait till it's closer to know how you feel?
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Old 12-17-2011, 11:40 AM   #35
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Just take all your next year's vacation at the end of the year! That will cut down your remaining "work days" and make it seem not so bad. Good luck!
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Old 12-17-2011, 12:06 PM   #36
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A silent Canadian speaks out:
The civil service rates are out of line. It is not the take home pay. It is the benefits package. It is costing more every year because it is so rich. It is not self-sustaining so general taxes have to make up for the shortfall. Those general taxpayers are by-and-large without a DB pension so they get a double whammy.

Now Nuiloa deserves it because she made a choice to tough it out for all those years. DWs cousin did the same thing for the revenuers (CRA). But it will eventually become unsustainable. She will be safe (except for COLA adjustments).

But we are not subsidizing the cost of gasoline because we ship cheap oil to the US and import at world prices from Saudi for Montreal refining. We also pay heavily for cigarettes and alcohol. But the free health care helps to compensate for that.

We also did not bail out GS and the other corporate robbers. Although we paid our dues in Afghanistan, we have saved by not being the defender of the free world.
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Old 12-19-2011, 04:25 PM   #37
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For people who are stressed out at their work, that would be a small penalty to pay. You, on the other hand, do not seem to be ready to go yet, and may just need another reason to hang on a little longer.

Tough, but nobody can decide for you. How early do you have to decide? Can you wait till it's closer to know how you feel?
My decision has been made for me. I just threw a temper tantrum over my SIL's decisions about how we're going to spend Christmas. So my friend and I have booked a vacation to Rarotonga, beginning in November through January. I won't spend another winter in Canada! And there's no point in going to work for 2 months, so September it is!
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Old 12-19-2011, 05:12 PM   #38
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By working 4 more months, you would gain a 10% on the severance pay of $50K, for another $5K. This is in addition to the difference between your pension and income during those 4 working months.
I'm not sure I understand the math. 10%?
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Old 12-19-2011, 08:09 PM   #39
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In one case, you said your marginal tax rate would be 50%, and the other case, it would be 40%.

Not knowing more, I assumed that most of your $50K severance would fall into the top bracket, and so, the 10% difference in tax on the $50K means a $5K difference in what you would keep. Perhaps my assumption was just too simplistic, meaning the difference in tax liabilities would be less than $5K, maybe far less.

Anyway, a winter in the Tropics is a far cry than one in Canada, that's for sure. Congrats!
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