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Painful Truth: Reading between numbers on tax stats

The Fraser Institute’s tax numbers don’t entirely add up.
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The folks over at the Fraser Institute must think we’re really dumb.

The right-wing think tank has released one of its regular reports, the Canadian Consumer Tax Index, which purportedly shows that we’re being taxed to death, government is bad, etc.

The problem is that it’s pretty obvious that they’ve cherry picked their numbers for this little exercise.

First let’s consider the graphics that open their video explanation. It’s two pie-charts side by side, one showing Canadian taxes in 1961, the other taxes in 2017.

The 1961 chart shows that the average Canadian household paid 34 per cent of its income that year in taxes. Now fast forward to 2017, and it’s 43 per cent! Oh no! We’re being robbed!

Except we’re clearly not. The folks who put this together apparently have enough academic rigour that they also included “necessities” as another portion of the pie chart. Back in 1961, it was 57 per cent of total income. In 2017? It’s down to 36 per cent.

They leave the remaining portion of the pie chart grey and empty, but add up those numbers, and it’s expanded a great deal.

Back in 1961, after taxes and necessities, the average household had just nine per cent of its income left over for transportation, savings, and discretionary spending. Now it’s up to 21 per cent – more than doubled!

The other elephant in the room is that our taxes got us a lot less back in 1961 than they do now. Would you like to go back to 1961? Hope you enjoy paying for your own health care! Not to mention the huge increase in paved roads, new bridges, environmental protections, policing, and social services since then.

But have taxes really been climbing up slowly over that whole period, grinding away more and more of our income?

Not really. A chart in the report shows that taxes were jumping just a few years later.

By 1969, Canadians paid 38.9 per cent of their income in taxes. After that, the increase slows down noticeably. By 1990, it was 42.95 per cent.

In some years, the percentage going to taxes dips slightly, as either taxes hold steady or wages increased faster than taxes did.

Finally, remember how the Fraser Institute used the “average” family? The average household in Canada makes $85,883. The median household, however, made a little more than $70,000 in the last census – and as a result, paid less tax, because more of their income was taxed at a lower rate. Half of all households in Canada make below the median.



Matthew Claxton

About the Author: Matthew Claxton

Raised in Langley, as a journalist today I focus on local politics, crime and homelessness.
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