Jun 9, 2017
Time to celebrate – it’s Tax Freedom Day!
There are few guarantees in life: death and taxes.
It can be a moving target, but today is the day Canadian families celebrate Tax Freedom Day.
Tax Freedom Day, according to the Fraser Institute, measures the total yearly tax burden imposed on families from all levels of government. If you had to pay all your taxes upfront, you’d give the government every dollar you earned before June 9.
We pay a lot in taxes, so much so that it would be difficult for the average person to figure it all out. There are various levels of governments supported by a wide range of taxes.
In 2017, the average Canadian family (with two or more people) will pay $47,135 in total taxes. That’s 43.4 per cent of its annual income ($108,674) going to income taxes, payroll taxes, health taxes, sales taxes, property taxes, carbon taxes, “sin” taxes and more.
To be fair, Tax Freedom Day for each province varies according to the extent of the provincially levied tax burden. Alberta celebrated first on May 21 and the latest to celebrate will be Newfoundland & Labrador on June 25.
The Broadbent Institute challenges the assumptions of a 40 per-cent-tax rate used in the total tax calculation by The Fraser Institute. They state only two per cent of working Canadians pay more than 30 per cent in income taxes. They also highlight the effective rate including income, payroll and commodity taxes for the typical Canadian family is closer to 24 per cent, suggesting that taxes are not an unreasonable burden on Canadian families.
There may be a difference in the calculation of total taxes verses income taxes but what we should all be able to agree on, is the revenue from taxes is what pays for vital public services such as healthcare, education and infrastructure.
Tax Freedom Day may only be symbolic, but it does feel kind of nice to think you are working for yourself and your family for the balance of the year.
