A parody rap video marking the later arrival of "tax freedom day" this year has been released by the Fraser Institute.
Tax freedom day, which arrived three days later this year, was created by the Fraser Institute to represent the amount of tax the average Canadian family pays to all levels of government.
If Canadians were required to pay all their taxes up front, they would have to pay every dollar they earned prior to tax freedom day to government.
The fact that tax freedom day falls later means Canadians, according to the Fraser Institute’s calculations, are paying more taxes this year.
The institute said in a release that tax freedom day, which falls on June 5, would arrive 25 days later if government had to cover current expenditures with current taxation instead of deferring the tax burden by running deficits.
Niels Veldhuis, the Fraser Institute’s senior economist, said: "The significant deficits racked up by the federal and provincial governments as they attempted to stimulate the economy must one day be paid for by taxes and should therefore be considered as deferred taxation."
The institute said that 15 of the 25 additional days are due to the federal deficit and the remainder to the provincial deficits.
When the economy recovers and incomes improve, a family's tax burden tends to increase, according to the institute. When household consumption increases it results in the payment of more sales and other consumption taxes by Canadian families.
Veldhuis also pointed out that several provinces increased taxes in 2010 which contributed to the later tax freedom day. For example, B.C. increased its medical services plan premiums.
In 2010, the average Canadian family with two or more individuals will earn $92,754 which includes wages, interest, dividends, private and government pension payments, old age pension payments, and other transfers from governments.
That family will pay $39,141 in taxes, for a total tax bill amounting to 42.2% of its income, according to the institute’s calculations.
The largest increase in taxes came in the form of income taxes, said the institute.
The Fraser Institute’s new music video, which, among other things, describes Don Cherry as a “subsidized flamingo” is available at www.fraserinstitute.org.