According to a recent study, the total tax bill of the average Canadian family has increased by 1,939% since 1961.
The Fraser Institute has constructed an index which measures the expenses of the average Canadian family. The public policy think tank calculates that taxes have increased by 1,939% between 1961 and 2015, while the amount of money spent on shelter, clothing, and food went up by 1,425%, 746%, and 645% respectively.
"In 2015, the average Canadian family (including single Canadians) earned $80,593 and paid $34,154 in total taxes compared to $30,293 on housing (rent and own), food and clothing combined," conclude the authorsMilagros Palacios, Charles Lammam, and Feixue Ren. "In other words, 42.4% of income went to taxes while 37.6 per cent went to basic necessities."
The average family spent 33.5% on taxes
The study points out that this is a significant change from 1961, when the average family spent 33.5% on taxes and 56.5% on housing, food, and clothing. Even if one accounts for inflation over the last 54 years, the study argues that the tax bill has still increased by 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,” comments Lammam.
The Fraser Institute places social security and pension deductions (i.e., Canada Pension Plan contributions) on its list of taxes. Since the CPP was established in 1965, its inclusion in the calculations contributes to the shift in family expenditures between 1961 and the present.
If you want to Explore the Possibilities to reduce the amount your family spends on taxes, speak to a Four Points Financial Advisor today by calling us at 1-866-235-0004.