Tax Free­dom Day in Canada was rec­og­nized June 9, Saskatchew­an date moved to June 7

The Southwest Booster - - OPINION - BY THE FRASER IN­STI­TUTE

Tax Free­dom Day for the aver­age Cana­dian fam­ily fell on June 9, one day later than in 2013, ac­cord­ing to the Fraser In­sti­tute’s an­nual cal­cu­la­tions.

Tax Free­dom Day mea­sures the to­tal tax bur­den im­posed on Cana­dian fam­i­lies by the federal, provin­cial and lo­cal gov­ern­ments.

If you had to pay all your taxes up front, you’d give govern­ment each and ev­ery dol­lar you earned be­fore Tax Free­dom Day. The later the Tax Free­dom Day, the heav­ier the tax bur­den.

“With­out our Tax Free- dom Day cal­cu­la­tions, it’s nearly im­pos­si­ble for Cana­dian fam­i­lies to know all the taxes they pay be­cause gov­ern­ments levy such a wide range of taxes in­clud­ing in­come taxes, pay­roll taxes, health taxes, sales taxes, property taxes, fuel taxes, ve­hi­cle taxes, profit taxes, im­port taxes, ‘sin’ taxes on liquor and tobacco, and more,” said Charles Lam­mam, res­i­dent scholar in eco­nomic pol­icy at the Fraser In­sti­tute and co-au­thor of Cana­di­ans Cel­e­brate Tax Free­dom Day on June 9, 2014.

Af­ter ac­count­ing for all taxes, the aver­age Cana­dian fam­ily (with two or more people) in 2014 will pay $43,435 in to­tal taxes, or 43.5 per cent of their an­nual in­come.

On the cal­en­dar, this per­cent­age trans­lates into a June 9 Tax Free­dom Day, when Cana­di­ans start work­ing for them­selves and their fam­i­lies in­stead of govern­ment.

So why does Tax Free- dom Day come one day later this year?

Be­cause the aver­age Cana­dian fam­ily’s to­tal tax bill will in­crease at a faster rate than in­come. Specif­i­cally, to­tal taxes will in­crease by 3.2 per cent (or $1,355) over last year while in­come will in­crease by 2.1 per cent (or $2,072).

“The de­lay in Tax Free­dom Day this year continues a trend of de­lays since 2009 when it fell on June 3. And gov­ern­ments across the coun­try are partly to blame since many have raised taxes af­ter the re­cent re­ces­sion to make up for big spend­ing in­creases and deficits,” Lam­mam said.

The $1,355 in­crease in the aver­age Cana­dian fam­ily’s to­tal tax bill in­cludes in­creases in in­come taxes ($589), pay­roll and health taxes ($364), sales taxes ($191) and property taxes ($47).

No cat­e­gory of taxes de­creased be­tween 2013 and 2014.

“With a ris­ing over­all tax bur­den, house­hold bud­gets get squeezed, lim­it­ing the amount of in­come fam­i­lies have to spend, save or pay down house­hold debt,” Lam­mam said.

But the tax bur­den doesn’t stop there. When gov­ern­ments spend be­yond their means, they bor­row, in­cur­ring deficits, which are es­sen­tially de­ferred taxes.

This year, the federal govern­ment and seven provin­cial gov­ern­ments are plan­ning deficits to­talling $18.8 bil­lion, with Ot­tawa ex­pect­ing a $2.9 bil­lion deficit while the prov­inces ex­pect com­bined deficits of $15.9 bil­lion.

“Ac­cord­ing to our cal­cu­la­tions, Tax Free­dom Day would come five days later this year, on June 14, if Cana­dian gov­ern­ments cov­ered their cur­rent spend­ing with even greater tax in­creases in­stead of bor­row­ing the short­fall,” Lam­mam said.

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