Your pocket is about to have a bit more room in it. As of Friday, the government will finally take its hand out — of course, not before taking nearly half your income.
Friday marks Tax Freedom Day, the day you stop working for the government and start working for yourself.
Now, I’m not just talking about income tax and neither are the folks at the Fraser Institute, who calculated the total tax paid and how long it takes the average family to pay their tax bill.
They add together all the taxes Canadians pay from payroll taxes like EI, sales taxes, property taxes, liquor and tobacco taxes, even auto taxes.
According to the study, the average Canadian family will earn $117,731 in income in 2019 and from that pay an estimated $52,675 in taxes. That means the average family is paying 44.7% of their income to various levels of government.
“If Canadians paid all their taxes up front, they would work the first 164 days of this year before bringing any money home to their families,” said Finn Poschmann, one of authors of the study.
That is shocking, and it is also wrong.
Oliver Wendell Holmes, an American Supreme Court justice from the early 20th century, is often cited by those that support the idea of making sure we all pay our fair share.
“Taxes are what we pay for civilized society,” Holmes wrote in the dissenting opinion of a 1927 court decision.
That is entirely accurate. Taxes pay for civilization and we should all pay our fair share — but when did almost half of your income being taken by government become fair?
The earliest year that the Fraser Institute has calculated Tax Freedom Day was 1961. Back in the days of Diefenbaker, the average Canadian family paid all their taxes by May 3.
Wouldn’t it be nice to go back to that?
Now some will say those were the days before universal health care. Fair enough — that comes with a cost. But surely we could work less for government without sacrificing core services.
As recently as 2005, Tax Freedom Day didn’t arrive on the national stage until June 25. Thanks in large part to tax changes from the Harper Conservatives, that date was pushed up to June 10 by 2010 before starting to creep back up in 2015.
Critics of the annual study claim it is an imperfect tool from an organization that wants lower taxes. Fair enough. No study is perfect, but it does give us a glimpse of what the totality of government costs us all.
“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,” Poschmann said.
And with that information, we can decide if we are getting value for our money.
My answer would be no.
Don’t expect Tax Freedom Day to arrive any sooner if the current government in Ottawa has its way. The Trudeau Liberals have already increased a number of taxes, including an annual increase on items like beer and wine, on top of payroll tax increases and the carbon tax, which will only go up.
In the last election, Justin Trudeau continually said we need to make sure people, especially the wealthy are paying their fair share. He continues to make that claim.
If almost half your income isn’t fair, what is?