Today is Tax Freedom Day – the day families in Canada have made enough money to pay off their total tax bills for the year as levied by all levels of government – according to a Fraser Institute report released this morning.
In the report, the think tank explained this means that if Canadians had to pay all their taxes for the year up front, they would give governments every single dollar earned prior to today.
Tax Freedom Day came a little earlier in 2012; last year, it fell on June 8.
“Canadians are waiting an extra two days to celebrate Tax Freedom Day partly because governments across the country continue to increase taxes in an effort to make up for their overspending and deficits,” said Fraser Institute associate director of tax and budget policy Charles Lammam, who is also the author of the report.
“What’s worse, some governments are relying on the most damaging types of tax increases, including higher tax rates on personal income and investment, which will ultimately discourage economic growth.”
The report stated that increases to B.C.’s corporate income tax, top personal tax rate and Medical Services Plan premiums contributed to the date being two days later.
The calculation used $97,254 as the average Canadian family income, with an average total of $42,400 being paid in taxes.
The taxes in this figure include:
- income taxes;
- payroll taxes (which includes social security, pension and health taxes);
- property taxes;
- sales taxes;
- fuel taxes;
- licence fees; and
- taxes on alcohol and tobacco.
Tax Freedom Day occurred on different dates for each province. In B.C., it came earlier than average, on June 4.
