Most Canadians believe they pay more taxes than their counterparts in the United States. Even politicians in the Canadian parliament have argued for lower taxes using this reasoning. Before claiming that Canadians pay more taxes, a few points need to be considered.

Key Takeaways

America’s wealthy are taxed 5% more than the federal tax rate.

Canada operates under a different tax system than the United States. For one thing, Canada’s Alternative Minimum Tax does not allow deductions on certain items.

The Mortgage Interest Deduction is praised by its supporters as being America’s most significant benefit of homeownership. However, if you do not own a home and earn meager wages, you will likely pay fewer taxes.

Personal Income Tax Guide

It is not practical to compare the statistics of tax income for both the United States and Canada. For one, the tax systems in the two countries are premised on different tenets. Because of this, it is only reasonable to delve into the contributions of various tax components.

Federal Income Taxes

A good look at the tax range for the year 2022 in both countries reveals that the United States charges a marginal tax rate of 10% to 37% on an individual’s income. In contrast, the average federal tax in Canada is 15% to 33% on an individual’s income.

State Versus Provincial Income Taxes

In the United States, state taxation systems are independent of the federal taxation system. Each state advances its own set of rules and tax rates. However, this is not the case in Canada, where provincial taxation systems are chained to the federal system, except in Quebec. In both countries, the wealthiest members of society pay a higher percentage of state taxes than those who earn less.

Unemployment Premiums

In Canada, employees pay premiums based on the number of wages earned. Although extra taxes are imposed on employees in Canada, they enjoy robust benefits from unemployment benefits and other programs such as maternity leave.


Canadians enjoy the benefit of a partially funded health plan. The plan ensures that everyone can access healthcare care without any additional contribution from the patient. Canadians rely on the Federal government to fund their care. This ensures that even people not employed can access care during illness.


It is impossible to compare the two different tax regimes without looking at the benefits packages of both countries. The comparison of the two systems is therefore not an exact one. It is easy to support a specific tax system when one only looks at the benefits it provides.

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