VANCOUVER – Like other Canadians, you work hard for your money. Faced with essential expenses such as food, clothing, and shelter, your household budget may feel squeezed. But what if we told you, your family’s biggest expense is taxes?
Sure, you know how much you pay in income tax. After all, it’s right there on your income tax return. In fact, income tax is the largest and most visible tax, taking $14 out of every $100 your family earns.
But that’s just scratching the surface.
In a new video produced by the Fraser Institute, we go beneath the fold and expose all the taxes imposed by all levels of government.
A deeper look reveals many other taxes that eat away at your income – some visible, many hidden.
Payroll taxes are among the visible. Skimmed off your pay cheque, mandatory contributions to EI and the CPP (and healthcare premiums if you live in Ontario, Quebec, or B.C.) take $10 out of your hard-earned $100.
Even more visible than payroll taxes are sales taxes which show up virtually every time you make a purchase. Those pesky sales taxes grab another $7 of every $100.
Property taxes are no more popular than sales taxes and scoop up $4. A common misconception is that only homeowners pay property taxes. But if you’re a renter, you also pay since property taxes are rolled into your monthly rent. In one form or another, we all pay property taxes.
You also pay a host of less visible taxes.
For instance, profit taxes suck up $4 of every $100 you earn. These are taxes you pay on investments in stocks and bonds (outside of RRSPs and TFSAs) and business income. While some people think corporations bear the cost of business taxes, in reality the cost is ultimately passed on to ordinary people like you – either as workers receiving lower wages, consumers paying higher prices, or investors earning lower returns in your investment portfolio.
The list of less visible taxes goes on.
Another $2 goes to “sin taxes” on alcohol, tobacco, and gambling. One dollar goes to vehicle related taxes including gas taxes, licence fees, and parking taxes. You spend an extra $2 on various other taxes such as import duties which are often hidden in the price of goods and services you consume.
So what’s the final bill?
Canadian governments take $44 out of every $100 your family earns. That’s more than you spend on food, clothing, and shelter combined.
Now, you tell us, how much more can your household budget take?
Charles Lammam and Hugh MacIntyre are analysts at the Fraser Institute. Taxes: A Canadian Family’s Biggest Expense can be viewed at the Fraser Institute’s YouTube channel.www.troymedia.com