The average Canadian family paid more in tax than they spent on housing, food, and clothes combined
Canadian families are increasingly burdened by the taxes they pay according to new research.
With the average family bringing in $91,535, the Fraser Institute analysis found that $38,963 was paid out in taxes. That accounts for 42% of income and exceeds the 36% share – or an average $33,178 – spent on housing (including rent or mortgage), food, and clothing combined.
The Institute was forecasting a higher tax burden for Canadians even before the surging cost of the coronavirus pandemic which will necessitate higher taxation at some point.
The figures are based on 2019 and include both visible taxes and those that are ‘hidden’ by federal, provincial, and local governments, including taxes on income tax, payroll, sales, carbon, property, health, fuel, and alcohol.
Although few wish for higher taxes, there has been much debate about the potential introduction of a wealth tax, which has support among many Canadians but would, according to the Montreal Economic Institute, have consequences for all taxpayers.
Jake Fuss, economist at the Fraser Institute and co-author of The Canadian Consumer Tax Index, 2020, says that the tax burden on Canadian families is significantly higher than in 1961 when the average family paid 33.5% in taxes compared to the 56.5% it spent on basic necessities.
Increase of more than 2000%
The analysis reveals that the average Canadian family’s tax bill has increased nominally since 1961 by 2,226% compared to the increases for annual housing costs (1,641%), clothing (793%), and food (663%).
“Considering the sheer amount of income that goes towards taxes in this country, Canadians may question whether or not we’re getting good value for our money,” Fuss said.