What do over 3,000,000 people living in poverty in Canada reach on tax freedom day?

A June 4, 2011, the London Free Press headline in the business section reads – “Canadians win their freedom on budget day”.

The article beneath the headline was about the dollar amount of total taxes the “average family” will pay in 2011, to all levels of government.

We are told that the average family will pay 42.6% of their income in taxes. Taxes included: income tax: sales tax; excise tax; auto, fuel and vehicle licences; pension, medical and social security (eg. EI, CPP); property tax; profits tax (no definition of what exactly that is); and other tax.

We are told that tax freedom day is a measure to show the impact of taxes on Canadian families.

There were several conclusions referred to in the article – “today’s deficits must one day be paid for by taxes”; “tax freedom day would fall 16 days later if governments paid for their current level of spending by raising taxes, rather than running up deficits”; and “tax freedom day is later this year mainly because of the improving economy”.

“Tax freedom day” – I get it. Prior to joining Mission Services of London, I spent 25 years as a CA very aware of tax freedom day, following it and literally and metaphorically shaking my head. Taxes of all types had a profound effect on my clients.

And now, in a different place, with a different view, I still literally and metaphorically shake my head. This time it’s because I see it in a different context, not a better or worse context, simply different. Some of my questions are the same, some are different. Not better or worse, just different.

The newspaper article is about much more than how much tax we pay. It should lead us to questions about what things we care about, whom we care about, and what we are asking our governments to do with the money that we give to them.

But to adequately delve into those questions, we would need discussions on many different and varied topics: what is the purpose of taxation; which is more equitable, direct or indirect taxes; who decides what equitable is; what is our philosophy of government; perhaps what are our agreed upon societal values?

Here is some additional data that hopefully will generate some questions:

  • $94,831 – 2011 Average Canadian family income
  • $39,960 – 2011 average family tax bill
  • $6,441 – the sales tax (eg. HST) portion of the average family tax bill.
  • $21,320 – 2011 earnings in Ontario at minimum wage working 40 hours per week for 52 weeks
  • $6,396 – what affordable housing should cost for a person earning minimum wage in Ontario, according to CMHC
  • 34,278,400 – estimated population of Canada on January 1, 2011 according to Stats Can
  • Between 10 and 12% – percentage of Canadians living below the “low income cut off line” since 2000 according to Stats Can, or 3,700,000

The average Canadian family reaches tax freedom day on June 6, 2011.

What do over 3,000,000 people living in poverty in Canada reach on June 6, 2011?

Peter Rozeluk, Executive Director

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