Canadians Spend 41% of Annual Income on Taxes

Photo by ambert
Photo by ambert

Canadian families paid more on taxes than on food, clothing, and shelter combined in 2010, reports a new study released by the Fraser Institute, Canada’s leading public policy think-tank.

“Taxes have grown over the past 49 years to the point that government is now the largest expenditure facing a family,” said Niels Veldhuis, Fraser Institute senior economist. He is also co-author of Canadian Consumer Tax Index, an index of the tax bill. It calculates the total tax bill paid by a Canadian family with average income as the sum of the taxes that the family pays to all governments. The Canadian Consumer Tax Index tracks the price of goods and services that the government buys on behalf of Canadians.

The situation was similar in 2010, when an average Canadian family with an income of $72,393 spent 41.3% of its revenue on taxes and 34.0% on the necessities of life: food, clothing, and shelter. The Business Review also indicated that, in 1961, the average family spent 33.5% of its income on taxes and over 56% on food, clothing, and shelter. Since then, the average Canadian family income tax percentage has risen by 1,686%, while expenditures on shelter have increased by 1,175%, food by 498%, clothing by 510%, and the Consumer Price Index by 642%.

“The average Canadian family has seen its total tax bill increase by an astounding 1,686 per cent over the past 49 years. As a result, taxes have become the most significant item in family budgets,” noted Veldhuis in a press release. “At this time of year, most Canadians are focused on filing their income tax returns. But personal income taxes account for just about one-third of the total tax bill paid by the average Canadian family in 2010.”

The government deficit has a significant impact on the high tax spending. “Unless governments get spending under control and find a way to reduce their deficits, Canadian families face the spectre of increased taxation,” says Charles Lammam, Fraser Institute senior policy analyst.

This entry was posted in Calgary Real Estate News. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *