VANCOUVER, April 16 /CNW/ - The average Canadian family spends more money
on taxes than on necessities of life such as food, clothing, and housing,
according to a study from The Fraser Institute, an independent research
organization with offices across Canada.
The Canadian Consumer Tax Index, 2007, shows that even though the income
of the average Canadian family has increased significantly since 1961, their
total tax bill has increased at a much higher rate.
- In 1961, the average Canadian family earned an income of $5,000 and
paid $1,675 in total taxes - 33.5 per cent of its income.
- In 2006, the average Canadian family earned an income of $63,001 and
paid total taxes equaling $28,311 - 44.9 per cent of its income.
"The tax burden we face is made up of much more than just income tax.
When you add up all the taxes we have to pay to all levels of government, the
average Canadian family is paying more of its income to governments in the
form of taxes than they spend feeding, clothing and housing themselves," said
Niels Veldhuis, the study's co-author and Director of the Centre for Tax
Studies with the Fraser Institute.
The Canadian Consumer Tax Index calculates the total tax bill of the
average Canadian family by adding up the various taxes that the family pays to
federal, provincial, and local governments. These include direct taxes such as
income taxes, sales taxes, Employment Insurance and Canadian Pension Plan
contributions, and "hidden" taxes such as import duties, excise taxes on
tobacco and alcohol, amusement taxes, and gas taxes.
"As Canadians grapple with the stress and anxiety of completing their
income tax returns, any discussion of taxes naturally tends to focus on income
taxes. But personal income taxes account for only 32 per cent of the total
taxes the average Canadian family paid in 2006," Veldhuis added.
The Canadian Consumer Tax Index attempts to answer the question: How has
the tax burden of the average family changed since 1961?
The study found the increase in the total tax bill means the average
family now pays more money to various levels of government for taxes than it
spends on food, clothing and housing combined.
In 1961, the average family had to spend 56.5 per cent of their cash
income to obtain food, clothing and housing. In the same year, 33.5 per cent
of the family's income went to governments as tax.
By 1981, the situation had been reversed; governments took 40.8 per cent
of the income in the form of taxes, while the family used 40.5 per cent to buy
food, clothing and housing.
By 2006, the average family was giving 44.9 per cent of its income to
governments for taxes while using 35.6 per cent of its income to buy the
necessities of life - food, clothing and housing.
Since 1961, the total tax bill for the average Canadian family has
increased 1,590 per cent. By comparison, the cost of housing has increased
1,019 per cent, the cost of food 487 per cent and the cost of clothing has
increased 447 per cent since 1961.
"Over the past 45 years, taxes have become the single largest expenditure
in an average Canadian family's budget with the total tax bill for a typical
family increasing by 1,590 per cent since 1961," Veldhuis said.
The Fraser Institute is an independent research and educational
organization based in Canada. Its mission is to measure, study, and
communicate the impact of competitive markets and government intervention on
the welfare of individuals. To protect the Institute's independence, it does
not accept grants from governments or contracts for research. Visit
For further information:
For further information: Niels Veldhuis, Director, Centre for Tax
Studies, The Fraser Institute, Tel. (604) 714-4546, Email:
firstname.lastname@example.org; Jason Clemens, Director of Fiscal Studies, The
Fraser Institute, Tel. (604) 714-4544, Email: email@example.com