Taxes, not basic necessities make up largest Canadian household expense

Taxes, not basic necessities make up largest Canadian household expense
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The average Canadian family spends more on taxes than on housing, food and clothing combined, finds a new study recently released by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“Most people don’t realize it, but the average Canadian household now pays more in taxes than they spend on the basic necessities of life combined,” said Charles Lammam, Director of Fiscal Studies at the Fraser Institute and co-author of the Canadian Consumer Tax Index, which tracks the total tax bill of the average Canadian family from 1961 to 2015.

In 2015, both singles and families in Canada, on average earned $80,593 and paid $34,154 in total taxes compared to $30,293 on rental and owned housing, food and clothing combined.

In other words, 42.4% of income went to taxes while 37.6% went to basic necessities.

This represents a marked shift since 1961, when the average family spent 33.5% on taxes and 56.5% on housing, food, and clothing.

The total tax bill reflects both visible and hidden taxes that families pay to the federal, provincial and local governments, including income, payroll, sales, property, health, fuel and alcohol taxes, and more.

Since 1961, the average Canadian family’s total tax bill has increased by and astonishing 1,939%, dwarfing increases in annual food costs (645%), clothing (746%) and housing (1,425%).

Even accounting for inflation over the last 54 years, the tax bill has still increased 152.9%.

“Taxes help fund important government services, but the issue is the amount of taxes governments take compared to what Canadians get in return. With more than 42% of their income going to taxes, Canadians might ask whether they’re getting good value for their tax dollars,” Lammam said.

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