VivienM
Been here awhile...
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I am not talking about sales tax. I am talking about taxes the companies pay, such as corporate income tax, property taxes, etc. They are also affected by import duties, which are usually higher in Canada than in the US.
Yes, and you're confusing us with Europe.
The French, for example, are great at this game. They have low income taxes. A 20% sales tax, but every price posted anywhere has tax included, so no one realizes how much tax they're paying. And then they have all kinds of huge taxes on employers that, of course, don't show up on employees' pay stubs.
So, the French taxpayer seems to pay VERY LITTLE in taxes... because the taxes are all hidden. In fact, of course, the French tax burden is higher than in Canada or the U.S., but unless you're an economist poring over the numbers, you won't realize it.
The Canadian taxes are not hidden (except on gas and alcohol - two things on which I will happily admit our two levels of government screw us on). The vast majority of government revenue comes from income taxes on individuals and sales taxes added onto the price of goods, not from corporate taxes, import duties, and the like.
I don't remember the numbers, but I seemed to recall reading somewhere that US corporate taxes were actually rather on the high side, and that that was one why US business were incorporating in Bermuda and playing all kinds of other tax avoidance games. But I admit that I haven't compared the tax rates lately.
I am not criticizing the Canadian system, it is simply a matter of trade-offs that the country has made. Obviously, citizens of Canada get a lot of benefits in terms of government provided services and worker friendly labor laws, in exchange for paying more for goods. There is no free lunch. To claim that my comments are right-wing propaganda is absurd.
I have no problem paying more in income tax. I have no problem paying 13% in sales taxes ON TOP OF THE PRICE OF GOODS.
I have a problem being told that, on top of that, there are all kinds of "hidden" taxes that mean that goods cost 10-40% more here. Especially when they used to cost 20-30% less before the value of the Canadian dollar skyrocketed in the past 5 years.
I'd guess Canadian corporate taxes went down in the last 5 years (despite public perception south of the border, we've mostly had governments that have lowered burdens on business and cut most non-health social programs in the past 15 years). Sales taxes (which are on top of the prices I'm complaining about, not included in them) went down 2%.
If we always paid more for things (which is the case in Europe, and there, I happily believe that the hidden taxes play a big role), I'd be happy with your explanation. But this is a new trend that has everything to do with changes in currency value.
For anyone to claim that multi-national companies are conspiring to screw Canadians, while giving better deals to Americans is crazy. If all these companies charge more in Canada for the same goods than they do in the US, then there is reason for that, and the reason is directly related to the cost of doing business in Canada, and not any kind of conspiracy.
And I think there are plenty of other reasons:
1) The American market is a bigger market. For German luxury automakers, for example, the US market is about 50% of their sales. For Asian automakers, the US market makes up 90% of the sales for some North-American-only models. If they're not competitive in the US market, whooops, their plant is running at half-capacity... or worse. If their prices are high in Canada, and people buy a few more cars from the competition, that's not a huge deal for their bottom line.
2) Stronger American competition laws. There have traditionally been stronger rules against resale price maintenance and other anticompetitive practices in the US. This may explain why, for example, electronics are sold at huge discounts off MSRP by US online retailers, while it's hard to find similar discounts here.
3) People seem to still keep buying. Importing cars from the US is half-legal, but you often lose your warranty, you have no access to financing/leasing from the manufacturer, it requires a lot of paperwork, etc... and the manufacturers try to prevent their US dealers from selling to Canadians. So, if people are willing to pay a ridiculous price, who are the manufacturers to lower that price?
Blaming our tax system, though... I just can't accept.
And I have one question for you: if taxes or any other factor I've listed above are the reason for this, why are multinational automakers
a) voiding warranties for US-purchased vehicles in Canada, and
b) prohibiting their US dealers from selling vehicles to Canada?
Sure, grey market imports are bad for their Canadian dealers to some extent (they still get the more profitable service business, though...). In fact, some of these dealers import US cars and sell them on their used car side.
But for the manufacturer, if after taxes they make the same amount of money or more on a US-sold car (like you're implying), why would they care about what country the car was sold in?