Canadians are accustomed to paying various taxes to the government. The taxpayers’ money contributes to the development of society, education system, security, and much more. However, a new study shows that Canadians pay more taxes than they spend on food and housing. Actually, they spend on taxes 44% of their total income.
According to the Fraser Institute, the average Canadian family earned C$88,865 in 2018. Of this amount, C$39,299 went to pay taxes and C$32,214 were spent on basic necessities, including housing (rent or mortgage), food, and clothing. It means that most Canadians spent C$7,000 more on taxes than they did for the cost of living.
The study concludes that despite the insanely high rental rates or rising gas prices in some provinces, taxes are currently the biggest expense for Canadian families across the nation.
The study also shows that the average tax payments are almost three times higher than those that Canadians paid in 1961 after adjusting for inflation. The study notes that the average tax rate has increased from 33.5% to 44.2% since 1961, which means that Canadians spend a record amount on taxes — more than in the past 57 years.
Where is all this money going? Taxes that Canadians pay to federal, provincial, and local governments are important for financing public services that people use every day and cover various expenses such as salaries, housing, alcohol, fuel, and more.
However, co-author of the study Jake Fuss states, “Of course, taxes help fund important public services, but with more than 44% of their income going to taxes, Canadians might wonder whether they’re getting good value for their tax dollar.”