The average Canadian family spends more on taxes every year than they do on the necessities of life, argues a Fraser Institute study released August 12.
The total amount paid for taxes on income, payroll, health, sales, property, fuel, vehicle and other taxes adds up to over $32,000 on the average family’s income of just over $77,000 per year, said the report. This amounts to about 42% of income.
Meanwhile, the total amount paid for food, clothing and shelter combined amounts to about $28,000 per year – or 36% of income.
“If you asked people to name their household’s biggest expense, many would likely say housing, but in reality the average Canadian family spends more on taxes than all basic necessities including housing,” said report co-author Charles Lammam, resident scholar in economic policy at the Fraser Institute.
The report compares the total amount spent by the average family on taxes and other expenses from 1961 until 2013.
In 1961, the average Canadian family’s total tax bill was about 34% of net income, while necessities represented about 57%.
“Over the past five decades, the total tax bill grew much faster than the cost of basic necessities, so now taxes eat up more income than any other single family expense,” Lammam said.
It is worth noting, however, that the makeup of taxes paid by Canadians has likely changed considerably over the past five decades due to the introduction of a national health plan since 1961, the base year of the study.
