According to a new report, last year, the average canadian family spent nearly $ 40,000 in taxes, which exceeded the total cost of clothing, food and housing.
The annual report by the Fraser Institute, devoted to the study of canadian consumer tax index shows how changing the total amount of taxes over time. Last year, according to conclusions of experts of the Institute, the average tax burden is $ 39,299, which is almost 3 times more than Canadians paid in 1961, adjusted for inflation, and growing much faster than the cost of basic necessities, including housing.
The authors estimate that a typical family in 2018 spent on clothing, food and housing just over 32000 dollars .
“When you follow the trend for a couple of generations, it will become clear that we have significantly expanded the scope of government,” – said in an interview with Finn Pochmann, permanent research scientist at the Fraser Institute.
According to estimates of the Institute, as a percentage of average cash income tax rate increased from 33.5 % in 1961 to 40.8 % in 1981 and 44.2 % last year.
Since the early 1980-ies the overall performance remained relatively stable and ranged from 41% to 47%. “The expansion of the state sector was in the period from the 1960s to the 1980s years and at present it is kept within these limits,” said Mr. Poshman.
But, according to David MacDonald, senior economist canadian Centre for policy alternatives, tax increases contributed to the creation of programs that most Canadians consider it necessary.
“In 1961 we didn’t have National healthcare plans, we had no canadian pension plan, said Mr. McDonald. – Taxes don’t go nowhere”.
Another estimate canadian taxes on households increased dramatically, according to the Fraser Institute. In 2017, the Broadbent Institute has estimated that the typical canadian family has to spend about 24% of their income on taxes.
The key methodological difference is that the Fraser Institute includes a number of taxes that actually are paid not by individuals, and enterprises, but the size of their laid in cost of goods.
Deductions from wages paid by employers, for example, are part of the family tax account in the interpretation of the Fraser Institute. Also, the Fraser Institute includes taxes paid by canadian corporations for commercial profit, which in total is $ 4,726 per family.
Mr. pochmann the claims that the taxes on profits of legal entities is ultimately paid by the employees and consumers through lower wages and higher prices.
“Businesses don’t pay taxes, paid by the population. This is very substantiated written in the economic literature and the theory of taxation,” he said. However, corporate profits in the report of the canadian families are not distributed.
The report also draws attention to the disparity between how much Canadians pay in taxes and how much they spend on basic necessities, including shelter, food and clothing, which account for 36.3% of revenues. “Taxes that are not necessities, taking the largest part of family income,” – said in the press release of the Fraser Institute.
But with the development of economy, the share of income allocated to the purchase of necessities tends to decline.
“I believe that it is not uncommon among Western countries with well-developed social system, – said Mr. Poshman. We are no exception. Our taxes are neither prohibitive, nor too low”.