It’s called the Fraser Institute Canadian Consumer Tax Index. In their latest report they note that Canadians now pay more in taxes than they do for basic necessities.
The Fraser Institute is a policy think tank whose stated mission “is to measure, study, and communicate the impact of competitive markets and government interventions on the welfare of individuals.”
Charles Lammam is the Associate-Director of Budget and Tax Policy at the Institute and co-author of the report. He says, “Taxes are far and away the largest and fastest increasing expense in the average household budget,”
The report indicates Canadians are now paying about 43% of their income in taxes, compared to 37% for basic necessities such as food and shelter. This compares to about 33% of earnings going to taxes 50 years ago.
Mr Lammam notes that while salaries have certainly risen over time, the tax burden has risen more quickly.
One reason Canadians pay so much in tax is they don’t fully understand their tax bills, says Mr Lammam. “It’s very difficult, first, to keep track of some of the taxes you pay. Some of the taxes are hidden.”
The report says taxes for the average family have risen by a whopping 1,787 per cent since 1961.
That figure outpaced increases in the cost of shelter (1,290 per cent), clothing (607 per cent), and food (578 per cent). It has also outpaced the growth in Statistics Canada’s Consumer Price Index (675 per cent), which measures the average price that consumers pay for goods and services including shelter, food, clothing, transportation, health and personal care, education, and many others.
– In 2012, the average Canadian family (which includes both families and unattached individuals) earned income of $74,113 and paid $31,615 in taxes, for a tax bill representing 42.7 per cent of total income.
– In 1961, the average Canadian family earned income of $5,000 and paid $1,675 in taxes, for a tax bill representing 33.5 per cent of total income
The outlook for the future is not any brighter. Mr Lammam notes that most levels of government across Canada are spending more than they are bringing in, meaning at some point citizens will have to pay even more to cover those deficits.
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