Without getting too detailed this is a tax breakdown for a reported annual income of $40,000 in BC, Canada:
- Income tax – $5000
- Canadian Pension Plan(money for old people right now(Ponzi scheme)) – $1800
- Employment Insurance(in case I am out of a job and am eligible to collect) – $700
Total to government – $7500
Total leftover – $32,500
The first $10,000 is tax-free and the remaining $30,000 incurs a 25% tax(20% federal tax, 5% provincial tax).
That’s not entirely accurate since that’s just the money that is automatically taken from you. If you spend everything that you get leftover there is a 0 to 12% sales tax.
Most common examples:
0% – Healthier items at the grocery store
5% – Other grocery items and food at restaurants, gasoline.
12% – The great majority of transactions
If you purchase liquor from a store or a restaurant there is a 15% tax.
The amount of tax you pay can be largely dependent on your vices and lifestyle. A pack of 20 cigarettes will include a $4.78 tax(roughly half of total price).
There’s a $0.32 gas tax plus 5% sales tax for every litre of unleaded gasoline . The price per litre today is $1.35(taxes included). How much per gallon? Multiply by 3.78= $5.10.
The big one is if you own a home and have to pay property tax. You’ll likely be paying $2000 to $4000 a year.
There are other costs that aren’t labelled as a tax but in essence they are. A 15% cultural expectation tax(tipping) is expected at most restaurants. If your company doesn’t provide you free health insurance then a person of average income is required to pay roughly $50-75 a month for one person. If your annual income is less than $24,000 then it’s free.
If you are one of the many to have credit card debt then you have to pay about 20% a year in interest(we got you tax) on transactions that you have already paid sales tax on.
You can put your money in the bank and never spend it to avoid paying more taxes but one day you’ll pass the money on to a loved one who will spend it or if you don’t have anyone then the government will take it all. Either way they will get something sooner or later.
To avoid paying taxes where I live, the best route is to make less than $10,000 a year, eat only healthy food bought from the grocery store and buy through Craigslist.