Are you get­ting a good re­turn on your hard-earned money?

The Guardian (Charlottetown) - - OPINION - BY CHARLES LAM­MAM AND MI­LA­GROS PALA­CIOS THE FRASER IN­STI­TUTE Charles Lam­mam and Mi­la­gros Pala­cios are co-au­thors of the Fraser In­sti­tute study Cana­di­ans Celebrate Tax Free­dom Day on June 10, 2015 avail­able at www.fraserin­sti­tute.org. Watch this year’s

“If you had to pay all your taxes in ad­vance, you’d give gov­ern­ment each and ev­ery dol­lar you earned be­fore Tax Free­dom Day.In 2015, we es­ti­mate the av­er­age Cana­dian fam­ily (with two or more peo­ple) will pay $44,980 in to­tal taxes.”

No one re­ally thinks there shouldn’t be any taxes.

Af­ter all, how would gov­ern­ments fund im­por­tant public ser­vices that form the foun­da­tion of our econ­omy?

Think of ser­vices such as pro­tect­ing prop­erty, build­ing in­fra­struc­ture, up­hold­ing the le­gal sys­tem, to name a few.The real de­bate is about the amount of taxes gov­ern­ments ex­tract from us given the ser­vices we get in re­turn. Are we pay­ing too much, too lit­tle, or just the right amount? In other words, are we get­ting good value for our tax dol­lars?That’s up to you to de­cide.

But to make an in­formed as­sess­ment, you must have a com­plete un­der­stand­ing of all the taxes you pay. Un­for­tu­nately, it’s not so clear be­cause the dif­fer­ent lev­els of gov­ern­ment levy a wide range of taxes — some vis­i­ble, many hid­den. This in­cludes ev­ery­thing from in­come taxes, pay­roll taxes, health taxes, sales taxes, prop­erty taxes, fuel taxes, ve­hi­cle taxes, profit taxes, im­port taxes, to “sin” taxes on liquor and to­bacco, and much more.

The Fraser In­sti­tute’s an­nual Tax Free­dom Day cal­cu­la­tion is a handy mea­sure of the to­tal tax bur­den im­posed on Cana­dian fam­i­lies by the fed­eral, pro­vin­cial, and lo­cal gov­ern­ments. If you had to pay all your taxes in ad­vance, you’d give gov­ern­ment each and ev­ery dol­lar you earned be­fore Tax Free­dom Day.In 2015, we es­ti­mate the av­er­age Cana­dian fam­ily (with two or more peo­ple) will pay $44,980 in to­tal taxes. That works out to 43.7 per cent of an­nual in­come, which, on the cal­en­dar, rep­re­sents more than five months of in­come — from Jan­uary 1 to June 9. It’s not un­til June 10 — Tax Free­dom Day — when fam­i­lies fi­nally start work­ing for them­selves, not the gov­ern­ment. work­ing al­most half the year to pay for gov­ern­ment rea­son­able given the cur­rent mix of gov­ern­ment pro­grams and ser­vices? This is a ques­tion we don’t pur­port to an­swer here.But it makes you think.

Are gov­ern­ments do­ing too much?

Can they do what they do now — but more ef­fi­ciently and with fewer tax dol­lars? Would the in­come that goes to taxes be bet­ter used by you and your fam­ily for spend­ing, sav­ing, or pay­ing down house­hold debt? With 43.7 per cent of our in­come go­ing to taxes, it still isn’t enough to pay for what our gov­ern­ments do.This year, the fed­eral gov­ern­ment and seven pro­vin­cial gov­ern­ments (in­clud­ing On­tario) are plan­ning deficits to­talling $18.2 bil­lion. When gov­ern­ments spend be­yond their means, they bor­row, in­cur­ring deficits, which are es­sen­tially de­ferred taxes.Ac­cord­ing to our cal­cu­la­tions, Tax Free­dom Day would come four days later this year, on June 14, if Cana­dian gov­ern­ments cov­ered their cur­rent spend­ing with even greater tax in­creases in­stead of bor­row­ing to cover the short­fall. If that hap­pened, the per­cent­age of in­come go­ing to taxes would jump to 44.9 per cent.In the end, it’s up to you and your fam­ily to de­cide whether you’re get­ting good bang for your tax buck. But we all need a com­plete un­der­stand­ing of the to­tal tax bill to make an in­formed as­sess­ment.

And therein lies the value of our Tax Free­dom Day cal­cu­la­tion. So, are you happy with work­ing un­til June 10 to pay for gov­ern­ment?

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