Showing posts with label Tax Freedom Day. Show all posts
Showing posts with label Tax Freedom Day. Show all posts
Tuesday, June 26, 2012
Canada and Tax Freedom Day
A number of organizations in different countries usually on the right calculate what is called Tax Freedom Day. This is the day when if all your income went to pay your taxes up to then on that day you would be free and the rest of the year your income would go in your own pocket and not to the government.
Different countries have vastly different tax freedom days. The U.S. was on April 12 in 2011. Canada is a whole month later at June 12 th this year. However the latest listed here is Norway on July 29th. One might think that Norway must be a terrible place to live. However this site ranks Norway the number one country in the world to live a ranking it has held for some time.
The Tax Freedom Day somehow assumes that you are not really free until you stop paying the government. However for your taxes you receive services often services that benefit you personally. Norway for example has an extensive universal health care system that includes drugs.
If the Tax Freedom Day people wanted to be fair they should have a mortgage freedom day, the day that you finished off paying your mortgage for the year. Or there could be an Auto Financing Freedom Day. However, David Macdonald has a different twist on Tax Freedom Day.
MacDonald suggests there should be a freedom from government services day. He calculates a freedom from Medicare day. Although much medical care is paid by government insurance in Canada there are still quite a few medical expenses paid by the individual. This has been increasing over time.
In 1980 all our medical expenses were paid until Nov. 6 according to MacDonald. By 2011 the date was October 13th . We gained over a month of freedom in which we could pay for expenses all on our own. The period during which we must pay our own way without government help has been increasing every since 1980. Our freedom is increasing. For more see this article.
Tuesday, June 9, 2009
Average Canadian to pay $37,700 in taxes this year.
This is from the Winnipeg Free Press.
I looked up data from Statistics Canada and at least the average unattached Canadian does not even make that much money in a year. There is no source quote for Veldhuis' figure. But this material is crapola from the Fraser Institute a right-wing think tank that sometimes sounds as if it is the official think tank of the Canadian Taxpayer's Federation.
I have always wondered why there is no freedom from my mortgage payment day, or freedom from my car payment day!
The whole idea seems to be that payments made to provide us with schools, roads, health care, police, etc. by the government keep us in some sort of prison rather than providing us with much of what we prize in our life. It also seems to imply that somehow governments never spend wisely but individuals spending freely on gambling, booze, junk food or whatever is always a great boon.
Average Canadian to pay $37,700 in taxes this year
By: Niels Veldhuis
Saturday was Tax Freedom Day, the day the average Canadian has earned enough money to cover the total amount of taxes that they are obliged to pay to various levels of Canadian government. From here on in, Canadians are working for themselves and their families.
With the income tax filing deadline having just passed, many Canadians are likely still getting over the shock of just how much income tax they paid last year. Income taxes however account for only about one-third of the total taxes Canadians pay. Add property taxes, sales taxes, profit taxes, health taxes, social security taxes, alcohol taxes, tobacco taxes, fuel taxes and many others to the mix and the average Canadian will pay $37,700 in taxes (42.6 per cent of income) in 2009.
Fortunately, Tax Freedom Day came three days earlier in 2009 than in 2008. But before we get too excited, it is important to understand that the reduction in taxes has little to do with tax reductions by either the federal or provincial governments. Instead, the economic downturn has automatically eased the tax burden on the economy and resulted in an earlier tax freedom day.
In times like these when the economy slows and incomes decline, the tax burden of Canadian families tends to be reduced to a greater extent than income. That means an earlier day. Chalk up this accelerated decrease in the tax burden compared to decreases in income to the progressive nature of the Canadian tax system.
Progressivity means that as individuals earn more income, they pay proportionately more in taxes. The reverse is also true. It is this reverse phenomenon that produces an earlier day.
Changes aside, the real concern for most Canadians is whether they receive good value for the $37,700 they pay in taxes on average. While many Canadians happily pay their taxes to support the numerous government programs they believe are effective, many others are outraged at the level of taxation and the poor quality of the government services they finance.
On the benefits side, Canadians should consider the findings of the 2007 study -- Public Sector Efficiency: An International Comparison -- that measured the efficiency of the public sectors in Canada and 23 countries.
The study found that Canada's public sector was relatively inefficient and that we should be able to achieve the same outcomes from government programs while using only 75 per cent of current resources. In other words, there is approximately 25 per cent waste in Canada's public sector.
In addition, Canada's auditor general consistently finds case after case of government cost overruns, unnecessary spending, improperly managed programs and other examples of government failure.
Let's not forget the massive "stimulus" packages included in this year's federal and provincial budgets which will benefit a host of special interest groups including farmers, the auto industry, forestry, tourism, environmentalists, aboriginals, and arts and culture. Nor should we forget the $10.5 billion the federal government just poured into General Motors.
Canadians should also remember that we're not paying for all of this spending now -- the federal government and most provincial governments are running deficits this year and into the foreseeable future. At some point however, this debt must be paid back by taxes. In other words, deficits should be considered as deferred taxation. And it is also why later tax freedom days in the future are a real possibility.
If Canadian governments actually had to cover current expenditures with current taxation and were not able to defer any of the tax burden by running a deficit, tax freedom day would be significantly later in the year. In fact, it would arrive on June 25 -- 19 days later.
Niels Veldhuis is an economist with the Fraser Institute. Calculate your personal tax freedom day at www.fraserinstitute.org.
I looked up data from Statistics Canada and at least the average unattached Canadian does not even make that much money in a year. There is no source quote for Veldhuis' figure. But this material is crapola from the Fraser Institute a right-wing think tank that sometimes sounds as if it is the official think tank of the Canadian Taxpayer's Federation.
I have always wondered why there is no freedom from my mortgage payment day, or freedom from my car payment day!
The whole idea seems to be that payments made to provide us with schools, roads, health care, police, etc. by the government keep us in some sort of prison rather than providing us with much of what we prize in our life. It also seems to imply that somehow governments never spend wisely but individuals spending freely on gambling, booze, junk food or whatever is always a great boon.
Average Canadian to pay $37,700 in taxes this year
By: Niels Veldhuis
Saturday was Tax Freedom Day, the day the average Canadian has earned enough money to cover the total amount of taxes that they are obliged to pay to various levels of Canadian government. From here on in, Canadians are working for themselves and their families.
With the income tax filing deadline having just passed, many Canadians are likely still getting over the shock of just how much income tax they paid last year. Income taxes however account for only about one-third of the total taxes Canadians pay. Add property taxes, sales taxes, profit taxes, health taxes, social security taxes, alcohol taxes, tobacco taxes, fuel taxes and many others to the mix and the average Canadian will pay $37,700 in taxes (42.6 per cent of income) in 2009.
Fortunately, Tax Freedom Day came three days earlier in 2009 than in 2008. But before we get too excited, it is important to understand that the reduction in taxes has little to do with tax reductions by either the federal or provincial governments. Instead, the economic downturn has automatically eased the tax burden on the economy and resulted in an earlier tax freedom day.
In times like these when the economy slows and incomes decline, the tax burden of Canadian families tends to be reduced to a greater extent than income. That means an earlier day. Chalk up this accelerated decrease in the tax burden compared to decreases in income to the progressive nature of the Canadian tax system.
Progressivity means that as individuals earn more income, they pay proportionately more in taxes. The reverse is also true. It is this reverse phenomenon that produces an earlier day.
Changes aside, the real concern for most Canadians is whether they receive good value for the $37,700 they pay in taxes on average. While many Canadians happily pay their taxes to support the numerous government programs they believe are effective, many others are outraged at the level of taxation and the poor quality of the government services they finance.
On the benefits side, Canadians should consider the findings of the 2007 study -- Public Sector Efficiency: An International Comparison -- that measured the efficiency of the public sectors in Canada and 23 countries.
The study found that Canada's public sector was relatively inefficient and that we should be able to achieve the same outcomes from government programs while using only 75 per cent of current resources. In other words, there is approximately 25 per cent waste in Canada's public sector.
In addition, Canada's auditor general consistently finds case after case of government cost overruns, unnecessary spending, improperly managed programs and other examples of government failure.
Let's not forget the massive "stimulus" packages included in this year's federal and provincial budgets which will benefit a host of special interest groups including farmers, the auto industry, forestry, tourism, environmentalists, aboriginals, and arts and culture. Nor should we forget the $10.5 billion the federal government just poured into General Motors.
Canadians should also remember that we're not paying for all of this spending now -- the federal government and most provincial governments are running deficits this year and into the foreseeable future. At some point however, this debt must be paid back by taxes. In other words, deficits should be considered as deferred taxation. And it is also why later tax freedom days in the future are a real possibility.
If Canadian governments actually had to cover current expenditures with current taxation and were not able to defer any of the tax burden by running a deficit, tax freedom day would be significantly later in the year. In fact, it would arrive on June 25 -- 19 days later.
Niels Veldhuis is an economist with the Fraser Institute. Calculate your personal tax freedom day at www.fraserinstitute.org.
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