​The modern Canadian tax burden

Canadians are sending 42% of their income to the government.

​The modern Canadian tax burden
Charles Lammam, an analyst with the Fraser Institute, recently compiled a report that totals up the entire tax burden modern Canadian carry. The results are surprising.  In an interview with WP Lammam explained how it is modern Canadians are paying 42% of all that they make to the government.  

"For most ordinary Canadians it's surprisingly hard to get a sense of how much you pay in tax. You can look at income tax. But then you look at sales tax. There are all kinds of hidden taxes. We calculated that the total is at 42%, much higher than many think. Most Canadians probably think their single largest expense is housing. But that's not the case. The biggest single expense is tax." 

The average family, according to the group, brought in $77,381 in 2013, paying out 41.8 per cent of that in total tax, and 36.1 per cent on necessities such as food, clothes and housing. Compare that to 1961, when the numbers were $5,000, 33.5 per cent and 56.5 per cent, respectively. The Fraser Institute calculates that total taxes for the average family have surged 1,832 per cent since 1962, compared to 1,375 per cent for shelter, 620 per cent for clothes and 546 per cent for food.

"Some of it is growth in governments...but there is lots of stuff in here...incomes have increased, so many have been pushed up to higher brackets. But the bottom line is, there each has less to spend, or saving for education or retirement," says Lammam. 

Some economists talk about an optimal level of taxation. That is, there is a point that works to create wealth for the shared needs of a culture, but leaves enough for people to feel they are profiting enough from their own labours. Some suggest that numbers is between 26 and 30%, a number based on economic study. "We're far above that," says Lammam. "Over the past five decades, the total tax bill grew much faster than the cost of basic necessities, so now taxes eat up more income than any other single family expense...with more money going to the government, families have less to spend on things they care about, to save for education and retirement, and to pay down household debt."