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Tuesday, April 28, 2009

Fraser Institute: Canadian families paying more in taxes than they do for food, clothing, and shelter combined

20080312-fra0312 The average Canadian family spends nearly half its total income on taxes, more than it spends on food, clothing, and shelter, according to a new study from independent research organization the Fraser Institute.

The Canadian Consumer Tax Index 2009 shows that even though the income of the average Canadian family has increased significantly since 1961, their total tax bill has increased at a much higher rate.

- In 2008, the average Canadian family earned an income of $71,764 and paid total taxes equaling $31,535-43.9 per cent of its income.

- In 1961, the average Canadian family earned an income of $5,000 and paid $1,675 in total taxes-33.5 per cent of its income.

"Canadian families have seen their total tax bill increase by an astounding 1,783 per cent over the past 47 years," said Niels Veldhuis, the study's co-author and the Institute's director of fiscal studies.

"The tax burden faced by Canadians extends well beyond income tax. When you add up all the taxes Canadians pay to all levels of government, the typical family is sending more of its income to government than it spends on basic necessities such as food, clothing, and housing."

The Canadian Consumer Tax Index calculates the total tax bill of the typical Canadian family by adding up the various taxes that the family pays to federal, provincial, and local governments. These include direct taxes such as income taxes, sales taxes, Employment Insurance and Canadian Pension Plan contributions, as well as "hidden" taxes such as import duties, excise taxes on tobacco and alcohol, amusement taxes, and gas taxes.

"At this time of year, most Canadians are focussed on filing their income tax returns. But personal income taxes account for just 33 per cent of the total tax bill paid by the average Canadian family in 2008," Veldhuis said.

The Canadian Consumer Tax Index attempts to answer the question: How has the tax burden of the average family changed since 1961?

In 1961, the average family had to spend 56.5 per cent of their cash income to obtain food, clothing, and housing. In the same year, 33.5 per cent of the family's income went to governments as tax.

By 1981, the situation had been reversed; governments took 40.8 per cent of the income in the form of taxes, while the family used 40.5 per cent to buy food, clothing and housing.

By 2008, the average family was giving 43.9 per cent of its income to governments for taxes while using 35.7 per cent of its income to buy the necessities of life-food, clothing, and housing.

Since 1961, the total tax bill for the average Canadian family has increased 1,783 per cent. By comparison, the cost of housing has increased 1,218 per cent, the cost of food 532 per cent, and the cost of clothing has increased 536 per cent since 1961.

"Over the past 47 years, the amount of money the average Canadian family pays in taxes has grown more rapidly than any other expenditure, to the point where taxes are now a family's single largest expense," Veldhuis said.

The Fraser Institute is an independent research and educational organization with locations across North America and partnerships in more than 70 countries. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org.

[Source, Emphasis added]

Posted by P.M. Jaworski on April 28, 2009 in Economic freedom | Permalink


This report is as disturbing as it is common knowledge in this country. Here in Ontario, the premier of the province, Dalton McGuinty, has a solution: raise taxes on everything from gasoline to cell phone bills to new-home purchases to veterinarian visits for your pets.

So far the only candidate for leadership of the Progressive Conservative Party of Ontario that I've seen to voice his or her outrage has been finance critic Tim Hudak (MPP from Niagara West-Glanbrook.) He has taken to calling it the "DST" -- the Dalton Sales Tax -- which has already begun to stick.

Last time I cracked an economics textbook, the way out of a recession was through increased consumption and decreased unemployment. I'm sure a 13% sales tax on a whole slew of new consumer goods & services and a tax on new hires, new houses, and land transfers will really do the trick!

Posted by: RedTory2009 | 2009-04-28 9:09:36 AM

Thanks for the comment, RedTory2009. I'm glad to see Hudak make a strong case for lower taxes. Here's hoping Hudak's strong fiscal conservatism rub off on the other candidates.

Posted by: P.M. Jaworski | 2009-04-28 9:15:26 AM

This report is disturbing ... but only to a small minority of us. Ask people on the street if they like paying taxes. They will say "no". Then ask them if they think gov't should be providing all the services they do, bailing banks out, and protecting us against evil corporations. They will say "yes". We have a cultural problem.

I'm not disagreeing with anything you are saying but when I talk to people I don't see any reason to think that things will change in the short to medium term.

Posted by: Charles | 2009-04-28 9:36:16 AM

"Over the past 47 years, the amount of money the average Canadian family pays in taxes has grown more rapidly than any other expenditure, to the point where taxes are now a family's single largest expense,"

So what the F*ck are suggesting we do about this very old news?



Just keep whining about it suckers.

Posted by: Momar | 2009-04-28 11:47:27 AM

Just keep voting Lib or Nd and it will keep going up,unfortunately the Cons have followed in the tradition of the Libs to try and gain a majority.Harper can't do what's right and rein in spending without the support of the Bloc and they only care for themselves and to hell with ROC.

Posted by: Goff Tayler | 2009-04-28 3:12:23 PM

Just keep voting...for any one of the socialist parties (liberal ndp or conservative), and you'll keep getting the same thing, over and over. Its not so much the parties, its the system. Stop participating.

Posted by: JC | 2009-04-28 9:52:00 PM

A frontal attack on "taxes" per se will go nowhere. If the fiscal conservatives and all 46.5 libertarians focused all their energy on just one small step it should be to eliminate source deductions for income tax. If all income tax payers had to pay the whole shot every April without the invisibility of payroll withholding, sufficient outrage may incubate to effect change.

Posted by: John Chittick | 2009-04-28 10:44:01 PM

I crunched some numbers and did some math a couple of years ago and figured out that I paid about 55% in taxes. This is a combined figure based on property, GST, PST, income tax, capital gains, CPP, EI, etc. The figure was 55%. Stunning.

Posted by: Realist | 2009-04-28 11:18:49 PM

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