That graph is insane
this post was submitted on 27 Aug 2023
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cries in Canadian
This is definitely an average. Top earners dragging up the average makes it a shit number to use in most economical statistics. Median is better for income figures almost always these days.
Still shocking that Canada is this much worse than the US. It's also horrible here.
Yes, my takeaway here is that the wealth gap in Canada is not as bad as in the USA (assuming that the median income barely increased in both countries)
I hate it when the chart doesn't say what it depicts. I assume those are averages, not median. The average hides that fact that most people's real income has barely grown in 20 years. All the income growth comes from the top 20% or so, you don't see that in the average.
Recently saw the house Taylor Swift grew up in. Amazing mansion that would cost $2M in Canada or the Netherlands.
But it sold in 2022 in the USA for $800K.
The higher interest rates and property taxes keep the price of US homes a bit more reasonable than in Canada or the Netherlands.
And (as I understand) those are deductible for the income tax in the US, so working people have a tax advantage that investors don't have.
In any case, taxing property and lowering income tax seems like it would help working people afford homes relative to investors. It seems like a politically good move, too.
Eh, at least in my experience, interest in most normal mortgages ends up less than the standard deduction so it can't be claimed. It was a change Trump made to the tax code I think. I don't understand enough about it to know if it affects me negatively or not. I know it's better for me to claim the standard deduction instead of itemizing my deductions. This means I can't claim interest paid (which is bad), but the standard deduction is higher than it was before, so I think I'm still claiming more money as untaxable (which is good, I think?).
Maybe someone with more knowledge than me can chip in.
The standard deduction existed prior to Trump and changes every year, but I'm not sure exactly how it's determined. Under Trump, it was effectively doubled from what it was previously. You can view a historic chart on this Wikipedia page.
Your good/bad assessment is overly simplistic, but essentially correct. In your example, you CAN claim your mortgage interest, OR choose the standard deduction - But in YOUR situation you benefit MORE from the standard deduction.
With a larger standard deduction, those with 'simpler' financial situations benefit from a lowered taxable income amount, without having to do the complex bits of documenting/justifying deductions they claim. - And without the risk of a potential audit.
For example, someone who DOESN'T own their home or have expenses they could deduct, still get their income reduced by that standard amount.
High-complexity situations (rich people) don't benefit from it, and still are required to document and justify their deductions line-by-line.
The US tax system is overly complex and burdensome, but a higher standard deduction is, at least from my understanding, a benefit to the less fortunate that the more well-off don't also benefit from.
I couldn't tell you what income level represents the 'split' between those who benefit from it and those who don't. It has less to do with income and more to do with your broader situation - Mortgage amounts, expenses, etc.
This graph is so location dependent for the US. Where I am, home prices have gone up well over 10x since 1980. There are many places in the US where it is just as bad, or even worse than the average in Canada.
The issue in Canada is also location dependent, some areas 10x plus others not. But even worse is that housing across the board has gone up as people flee the high price areas, bringing demand to the cheaper areas, and therefor raising the prices.
There are a few areas that have become so impossible to afford (Canmore, Banff, Vancouver etc.) that the lower earning workers are living in tents (this also happens in the states but is new there I hear).
Yeah my home town that's a little over an hour outside of a city has small houses selling for half a million now. I don't even know how anyone from the town would afford that on their retail or factory work income
Did they stop making houses in Canada?
Dataisterrifying
Not if you buy at the dips like I did.🙃
This graph would look much different if it compared home prices in 2022-2023.
What do you mean
Someone better at such things than me needs to add a trendline for the ratio of median employee to median CEO earnings for publicly traded companies over the same period of time. Maybe it wouldn't look like I think it would - but maybe it would.
wot dey doin ova der?
New Zealand says hello.
Does anyone else see this post with -1 downvotes?
So, are we screwed?
How does this fit with purchased by non Canadian born people?