The date on which Canadians would have paid all their taxes if they did so upfront has come later in 2023 according to a new analysis
Imagine if you had to pay every dollar of tax before you started keeping your income for yourself.
As impractical as it would be, it’s a convenient way to demonstrate how much tax Canadians pay every year compared to how much of their income they get to keep.
And this year, it’s taken even longer to reach Tax Freedom Day according to an analysis by the Fraser Institute.
It found that when considering all levels of federal, provincial, and municipal government taxes, it would have taken until June 19 to have paid everything due.
The average two-person household with an income of $140,106 will pay $64,610 in taxes or 46.1% of their income.
The figure includes income taxes, payroll taxes including the Canada Pension Plan, health taxes, sales taxes (e.g. GST), property taxes, fuel taxes, carbon taxes, “sin” taxes and more.
It’s taken four days longer in 2023 to reach Tax Freedom Day than in did in 2021 and eight days longer than in 2019.
“If Canadians paid all their taxes up front, they would work the first 169 days of this year before bringing any money home for themselves and their families,” said Jake Fuss, Associate Director of Fiscal Studies at the Fraser Institute. “Canadians need to decide for themselves whether they are getting their money’s worth when it comes to how governments are spending their tax dollars.”
A recent report found that just 6% of Canadians felt that a tax burden above 40% was fair.
Two provinces will have to wait
However, while this week would see most Canadians clear of their tax burden, for some the wait goes on.
Tax Freedom Day in Newfoundland & Labrador isn’t until next Monday, June 26, while in Quebec it’s June 30.
The Fraser Institute also calculated the Balanced Budget Tax Freedom Day, the day when the average Canadian finally starts working for themselves if the governments paid for all of this year’s spending with taxes collected this year.
That falls on June 27 this year.
