Tax Freedom Day should arrive a lot earlier

Governments demand more than their fair share from family wallets

Like Christmas, it comes once each year — Tax Freedom Day, when the average Canadian stops paying tax bills and starts hanging on to their own money. It happened earlier this week, June 9, fittingly a day of sunshine and warm temperatures in Vancouver.

Disappointingly, this was one day later than last year because tax revenues are increasing faster than incomes.

Total average taxes are growing by 3.2 per cent this year, while income is to increase only 2.1 per cent.

Back in 2009 we celebrated the big day on June 3, which shows how much more onerous taxation has become in the aftermath of the Great Recession.

According to the Vancouver- based Fraser Institute, the average Canadian family faces a tax bill this year of $ 43,435, reflecting 43.5 per cent of total annual income.

That tax bill will take many forms, of course. There is federal income tax, provincial income tax, payroll taxes like CPP premiums, medical services premiums, sales taxes, property taxes, fuel taxes, vehicle taxes, profit taxes, import taxes, sin taxes on liquor and tobacco, property purchase taxes on real estate acquisitions, municipal parking taxes and a special carbon tax on gasoline in B. C.

And then there are the deferred taxes that we punt into the future — represented by government deficits. And there are plenty of those, with Ottawa and seven provinces forecasting deficits this year.

Such deferred taxes are not considered in calculating Tax Freedom Day which arrives first in Alberta, on May 23.

Then, on June 5, P. E. I. celebrates the day. On June 6, it becomes B. C.’ s turn. Newfoundlanders are the last to be unburdened, on June 22.

Tax Freedom Day is a useful reminder for politicians that they had better spend constituents’ cash wisely because the option of extracting more from taxpayers would be untenable.

With more than 40 per cent of all earned money already getting sucked into the public sector maw, governments have pretty well hit the wall on taxation.

When groups like B. C.’ s teachers demand healthy pay raises, they must keep in mind the only means their public sector employer has to acquire additional money is from people’s pockets, or through cuts to existing services.

Recognition of Canada’s heavy tax levels also serves as a reality check for those who demand additional services from governments.

It is useful to remember that well more than half of provincial coffers are emptied simply through provision of health and education services.

In B. C., the province spends the equivalent of 42 cents of every tax dollar on health care, another 27 cents on K- to- 12 education. That leaves 31 cents for absolutely everything else, including post- secondary education.

And the greater the take of the public sector, the more constrained becomes the private sector, which relies on individuals keeping sufficient amounts of their cash to allow stores and businesses to keep functioning.

Working for government until early June really is excessive. Once governments’ budgets are balanced, new spending programs should be deferred until tax levels can be moderated.