August 23, 2016
Canadians are spending more of their income on taxes than they are on basic necessities.
Families likely already know this from doing their own budgeting. But a new study from the Fraser Institute offers cold comfort and confirms it as fact.
This is one of the saddest lines to come out of a public policy report in a long time: "It is clear that taxes have become the most significant item in family budgets, and that taxes have grown more rapidly than any other single item."
The 2016 edition of the Canadian Consumer Tax Index, that the institute regularly compiles, doesn't just look at income taxes. It tallies the total impact of all taxes including income, payroll, sales, liquor and fuel. It's a list politicians have been adding to over the years and have given no indication it's going to get any shorter.
In 1961, the average family shelled out a third of their income on taxes and just over half on basic necessities like food and housing. Today we pay just under half on taxes and a third on those necessities. More of our money now goes to the government than it does to feed, clothe and shelter our family.
The cost of pretty much everything has gone up since the 1960s. That's no surprise. But taxes have increased much more than inflation. They've gone up three times more than the price of food, for instance.
In the '60s, the average family shelled out $1,675 in taxes and $1,259 for food. Today, our annual food costs are $9,374. But the tax portion has skyrocketed to $34,154.
This sad story makes you wonder: Does the government work for us? Or do we work for the government? It's looking more and more like the second option.
In their own words
"Taxes have grown much more rapidly than any other single expenditure for the average Canadian family."
- The Canadian Consumer Tax Index, 2016 edition
Increase in expenses since 1961 to 2015:
Total percentage of family income spent on taxes:
1961 - 33.5%
2015 - 42.4%