Canadian Think Tank Organisation Says Tax Burden Easing But Not Enough

by Amanda Banks, Tax-news.com, London

14 June 2001

According to a new book released this week by The Fraser Institute, the total tax bill of the average Canadian family has increased by 1,351 per cent since 1961. Entitled 'Tax Facts 12', the book is the latest edition of a biennial study which looks at how the average Canadian tax bill has changed over the last forty years. Jason Clemens, director of fiscal studies at the Institute, explained that the book provides Canadians 'with a basic tool kit of knowledge about taxation in order to enhance rational debate about this issue.'

The total tax burden of Canadians appears to be easing, according to Joel Emes, a senior research economist from the Institute and co-author of the book. The tax burden peaked at 48.7% of total income in 1997 but subsequent tax cuts have now dropped the figure to 47.5% and it is at its lowest level since 1996.

But the tax bill now accounts for more of the average Canadian's budget than shelter, food and clothing combined - a marked reversal from 1961 when the average family had an income of (Canadian) $5,000 with a tax bill of $1,675 (33.5%) compared to an average family income of $51,174 in 2000 with a tax bill of $24,309 (47.5%) comprising federal, provincial, municipal direct and hidden taxes.

Income tax is the single largest type of tax that Canadians have to pay but the report suggests that many do not know that income tax represents less than half of the total amount of taxes they pay in one year. In 2000, for example, the average family paid income taxes of $8,071. Other taxes ranging from sales to motor vehicle, to property taxes, amounted to $16,238 and it is these additional taxes that account for over two-thirds of the total tax bill of the average Canadian family.

The Fraser Institute is an independent public policy organisation based in Vancouver, Canada. The complete findings of the Institute's research can be viewed at: http://www.fraserinstitute.ca

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