Have you ever heard of Tax Freedom Day?
That’s the day of the year Canadians start working for themselves, not government, according to the Fraser Institute, a public policy think-tank.
The institute’s new study shows Tax Freedom Day fell on Monday, June 19.
In other words, if you had to pay all your federal, provincial and municipal taxes up front, you would give government every dollar you earned from Jan. 1 to June 19.
This year, Tax Freedom Day comes eight days later than in 2019, the last year before the pandemic, and four days later than 2021 when it fell on June 15.
“If Canadians paid all their taxes up front, they would work the first 169 days of this year before bringing any money home for themselves and their families,” said Jake Fuss, Fraser Institute, associate director of fiscal studies.
In 2023, the average Canadian family (with two or more people) will pay $64,610 in total taxes, the Fraser Institute calculates.
That’s 46.1 per cent of its annual income ($140,106) going to income taxes, payroll taxes, including the Canada Pension Plan, health taxes, sales taxes (like the GST), property taxes, fuel taxes, carbon taxes, “sin” taxes and more.
“Tax Freedom Day helps put the total tax burden in perspective, and helps Canadians understand just how much of their money they pay in taxes every year,” Fuss said. “Canadians need to decide for themselves whether they are getting their money’s worth when it comes to how governments are spending their tax dollars.”
June 19, national Tax Freedom Day, takes into account all Canadians. The day in each province varies according to the extent of the provincially and locally levied tax burden. The earliest provincial Tax Freedom Day fell on June 6 in Manitoba, while the latest falls on June 30 in Quebec. B.C.’s fell on June 9.
The Fraser Institute warns that Canadians should also be worried about the $47 billion in deficits the federal and provincial governments are forecasting this year, because they will have substantial tax implications in future years.
To better illustrate this point, the study calculates a Balanced Budget Tax Freedom Day — the day of the year when the average Canadian finally starts working for themselves if the governments paid for all of this year’s spending with taxes collected this year.
The Balanced Budget Tax Freedom Day for 2023 arrives today, June 27.
-By Sheri Regnier, Black Press