Wednesday, July 31, 2024

Average Family Spends 43 Percent of Income on Taxes, More Than on Necessities: Report

 I wonder what American Families income tax burden is?

The average Canadian family continues to spend more of its income on taxes than on basic necessities, according to a newly released report.

The Fraser Institute released its latest Consumer Tax Index on July 30. The index has been tracking Canada’s tax burden since 1961.

The average Canadian family in 2023 spent 43 percent of its income on taxes and 35.6 percent on basic necessities such as food, clothing, and shelter, the report said.

“Considering the sheer amount of income that goes towards taxes in this country, Canadians may question whether or not we’re getting good value for our money,” Fraser Institute director of fiscal studies Jake Fuss said in a statement.

The institute said the average household earned $109,235 in 2023 and paid $46,988 in total taxes, including income taxes, payroll taxes, sales taxes, property taxes, fuel taxes, carbon taxes, and vehicle taxes.

By comparison, in 1961, the average family had an income of $5,000 and paid $1,675 in taxes, for a total tax burden of 33.5 percent.

The institute notes a 2,705 percent increase in Canadians’ tax bill since 1961. In comparison, the Consumer Price Index (CPI), which measures the average price consumers pay for items such as food, shelter, clothing, transportation, and health care, rose 901 percent over the same period.

When adjusted for inflation, Canadians’ tax bills have increased by 180 percent since 1961, the institute said.

The Fraser Institute also notes that since governments are running deficits, these will eventually need to be paid for by taxes.

“The total tax bill of the average family would be much higher than it actually is if, instead of financing its expenditures with deficits, all Canadian governments had simply increased tax rates to balance their budgets,” the report said.

Adding this deferred taxation would raise the 2,705 percent tax increase since 1961 to 2,852 percent.

Data from the institute also indicate how the average expenditure for shelter has increased over the years. It marks the highest increase among basic necessities, with a 2,006 percent rise since 1961 compared to 901 percent for food and 478 percent for clothing.

Canadians have been experiencing affordability issues in recent years with first a spike in inflation and more recently with high interest rates as the central bank works to rein in inflation.

The Liberal government has been focused on creating social programs to help with affordability, whereas the Conservative Opposition has said limiting the size of government and cutting spending is needed to bring down the cost of living.

To help fund its programs, Ottawa recently increased the capital gains “inclusion rate.” Individuals previously paid tax only on 50 percent of their total capital gains. Under the new measure, effective June 25, they now pay tax on 66.7 percent of any capital gains above $250,000, though they still pay tax only on half of their capital gains up to that threshold.
“Canada could finance these critical investments by taking on more debt, but that would place an unfair burden on younger generations,” Finance Minister Chrystia Freeland said about the measure on June 10.
Ms. Freeland also said the recently enacted Digital Services Tax on large foreign tech companies is needed for the same reason.

“As Canadians, we have such a crying need for investment in so many things in our country, whether it is housing, or making life more affordable, or investing in productivity and growth,” she said in early July.

https://www.theepochtimes.com/world/average-family-spends-43-percent-of-income-on-taxes-more-than-on-necessities-report-5696480?&utm_source=MB_article_paid&utm_campaign=MB_article_2024-07-31-ca&utm_medium=email&est=Xh4Bk8sPRp%2B83VfLvVC5inYifRtOGRaWukW4WdVPUpwJkj9Wu2yJpg31PBb5WPVwhYhf&utm_content=highlight-news-2