Winnipeg Free Press - PRINT EDITION

Average tax bill $31,615

  • Print

VANCOUVER -- Unless analyzing tax policy is part of your day job, you likely avoid thinking about what ultimately can be a polarizing topic. But with the deadline for filing our income-tax returns around the corner, we're all forced to at least temporarily think about taxes. The deadline, after all, is a sharp reminder of how much income tax we paid throughout the year.

While some gladly pay their share -- thinking of the numerous government programs these tax dollars finance -- others feel their income-tax burden is too high. No matter where you fall in this debate, to truly gauge whether you're getting value for your tax dollars, you must have a complete understanding of all the taxes you pay -- in addition to income taxes.

For that you must look beyond your income tax returns because income taxes form only a portion of the total tax bill imposed on us by all levels of government (federal, provincial, and local).

According to our calculations, a Canadian family with average income of $74,113 paid $9,195 in income taxes in 2012. While personal income taxes are the single largest type of tax paid by families, they represent less than one-third of the total.

Two other significant taxes on our tax returns are premiums for the Canada Pension Plan and Employment Insurance. In addition, residents of British Columbia, Ontario, and Quebec pay health-care taxes either through direct premiums or payroll taxes.

All together, the average Canadian family paid some $6,769 in CPP, EI, and health taxes in 2012. Payroll taxes are second only to income taxes as the single largest government levy.

Next up are sales taxes, which many of us hate since they show up every time we make a purchase. Calculating the amount of sales taxes paid by Canadian families is difficult as it requires people to track all their purchases of taxable goods and services. Nonetheless, our estimates suggest the average Canadian family paid about $4,812 in sales taxes last year.

Property taxes are no more popular than sales taxes and add $3,607 to the average family's tax bill. A common misconception is that only homeowners pay property taxes. But renters also pay these taxes since they are rolled into their monthly rent. In one form or another, we all pay property taxes.

We're not done yet. There are less visible taxes Canadians pay but do not see. For instance, the average Canadian family paid approximately $3,302 in profit taxes in 2012.

Taxes on liquor, tobacco, and amusement amounted to $1,680 for the average Canadian family, while automobile and gas taxes totalled about $791. Finally, families paid $1,457 in other taxes that are not easily discernible (think: import duties).

Summed up, the average Canadian family faced a tax bill of $31,615 in 2012 against income of $74,113. That means 42.7 per cent of the family's budget went to paying for government.

For perspective, in that same year 36.9 per cent of the budget went to paying for food, clothing, and shelter combined. Indeed, families now pay more in taxes that they do for basic necessities.

And it doesn't end there. Most federal and provincial governments are running budget deficits, meaning current taxes do not cover current government spending. With these budget deficits, Canadian governments of today are putting off tax bills that will inevitably come due.

Including deferred taxation (deficits) raises the total tax bill by an additional $2,417 to $34,032.

This year's tax deadline will bring mixed views on the appropriate level of income taxation in Canada. But it's critical for everyone to realize the taxes delineated on their income-tax returns are only part of the total they pay.

With a more complete understanding of the total tax bill, taxpayers can better assess whether they are receiving value-for-money in terms of the services they receive from government. Armed with this knowledge, we can hold our governments more accountable for the resources they extract.

 

Charles Lammam and Milagros Palacios are economists with the Fraser Institute. See Canadian Consumer Tax Index 2013 at www.fraserinstitute.org.

Republished from the Winnipeg Free Press print edition April 25, 2013 A15

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Willy wants to get back to winning

View more like this

Photo Store Gallery

  • MIKE DEAL / WINNIPEG FREE PRESS 060711 Chris Pedersen breeds Monarch butterflies in his back yard in East Selkirk watching as it transforms from the Larva or caterpillar through the Chrysalis stage to an adult Monarch. Here an adult Monarch within an hour of it emerging from the Chrysalis which can be seen underneath it.
  • Marc Gallant / Winnipeg Free Press.  Local/Standup- Morning Fog. Horse prances in field by McPhillips Road, north of Winnipeg. 060605.

View More Gallery Photos

Poll

Do you think the Jets' three pre-season losses in a row are a sign of things to come?

View Results

View Related Story

Ads by Google