Canadians spending more money on taxes than combined necessities: report
Canadian families are now spending more money on taxes, than on food, clothing, and shelter combined, according to a new report from the Fraser Institute.
“Taxes are far and away the largest and fastest-increasing expense in the average household budget,” said Charles Lammam, Fraser Institute associate director and co-author of the Canadian Consumer Tax Index.
“In fact, the tax bill for the average family has grown a whopping 1,787 per cent since 1961.”
The Canadian Consumer Tax Index calculates that in 2012, almost half (42.7 per cent) of an average family’s income went towards taxes – federal, provincial, and local, while only 36.9 per cent of income was spent on food, clothing, and shelter.
The Fraser Institute says there has been a 1,787 per cent growth in taxes, which outpaces the cost of shelter, (1,290 per cent), clothing (607 per cent), and food (578 per cent).
The Fraser Institute’s Canadian Consumer Tax Index tracks the total tax bill of the average Canadian family from 1961 to 2012 by adding up the various taxes that a family pays to federal, provincial, and local governments, including income taxes, sales taxes, property taxes, Employment Insurance and Canadian Pension Plan contributions, and “hidden” taxes such as import duties, profit taxes, and gas taxes.
This year’s index shows that while the average family’s income has increased significantly over the past five decades, the average tax bill has grown even more:
- 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 report also notes that in 1961, the average family spent 56.5 per cent of its income to pay for shelter, food, and clothing; in the same year, 33.5 per cent of the family’s income went towards taxes. By 2012, the situation was reversed from 1961: the average family spent 36.9 of its income on basic necessities while 42.7 per cent of income went to paying taxes.
© 2013 Shaw Media