OTTAWA, June 9, 2017 /CNW/ - It is officially alternative-fact season in Canada - the Fraser Institute proclaimed today the 2017 "Tax Freedom Day." Every year the conservative think tank claims that this day marks the moment Canadians start earning money for themselves. New research from the Broadbent Institute shows that the calculations used to support "Tax Freedom Day" are misleading.
The Brass Tax: Busting Myths About Overtaxed Canadians, a new study conducted for the Broadbent Institute by Richard Shillington and Robin Shaban, provides compelling evidence that the Fraser Institute's methodology is flawed and consequently does not paint an accurate picture of typical Canadian tax rates.
A central Fraser Institute claim on "Tax Freedom Day" is that the "average" Canadian family pays over 40 per cent in taxes. In fact, The Brass Tax shows that the typical Canadian family pays only about half that, an effective tax rate of just 24 per cent – income, payroll, and commodity taxes combined.
Other key facts from the report that debunk the Fraser Institute's claims include:
- Only 20 per cent of working Canadians pay more than 20 per cent of their income in income taxes, and only 2 per cent of Canadians pay more than 30 per cent.
- The typical Canadian family pays an effective income tax rate of 11 per cent.
- Canada's tax revenue relative to the size of the economy is trending downward and is substantially lower than that of most industrialized countries (25th out of 35 in the OECD)
- The typical working Canadian individual aged 25 to 54 pays a rate of approximately 14 per cent in income taxes.
- The share of income tax paid by the top 1 per cent, has been falling since 2000.
"Every year on the so-called 'Tax Freedom Day' the Fraser Institute makes misleading claims about tax rates in Canada, and every year this myth goes unchecked," said Rick Smith, Executive Director of the Broadbent Institute. "This gives Canadians the false impression that taxes are an unreasonable burden. More importantly, it undervalues public services and undermines our ability to invest in programs that are key to the well-being of all Canadians. Some more truth on the tax issue is in order."
SOURCE Broadbent Institute
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