Taxes

The Fraser Institute issued a news release that was carried widely by the mainstream media yesterday. You can read the details here but basically their research finds that Canadians spend more on taxes then on the necessities of life (housing, food, clothing):

In 2013, 41.8 percent of the average family”™s income went to pay taxes while in 1961, only 33.5 percent of the family”™s income went to taxes.

I went through our expenses in 2013 and sure enough, we were above 41 per cent just on income and property taxes. The Fraser Institute includes all taxes such as income taxes, payroll taxes, health taxes, sales taxes, property taxes, fuel taxes, vehicle taxes, etc.

It certainly seems dark and gloomy, doesn’t it? All of those dollars going to a greedy, wasteful government.

But.

In 1961, there was no medicare, no Canada Pension Plan, no Guaranteed Income Supplement or Old Age Security. Most Canadians did not finish high school never mind college and university. I suspect many Canadians consider education, health care, CPP and many other government services as necessities of life. Would the private sector be more efficient in providing those services and making them widely accessible to Canadians?

I have no wish to see my taxes go up from here but there is a cost to sustain the services we expect from our country. I know that I enjoy a wonderful standard of living in this country as do the vast majority of families living and working in Canada. And paying taxes is part of maintaining our Canadian society.

So why is the Fraser Institute publishing such data? To hold government to account:

With almost 42 per cent of income going to taxes, Canadians should ask whether they get the best value for their tax dollars.

Fair enough. But how do we assess whether we are getting the best value for our tax dollars? On this question, the Fraser Institute offers no perspective.

The Fraser Institute is a registered charity with the Canada Revenue Agency. They are a tax-exempt organization. They pay no taxes which seems a bit ironic given one of their stated mandates.

The Fraser Institute fills a significant gap in our education system by teaching kids about the power of free enterprise and the often negative impact of government intervention.

In 2013, they received in excess of $8 million in revenues with most of that coming from individual donors and foundations. Therein lies the power of free enterprise and the negative impact of government intervention for the Fraser Institute: tax-exempt revenue for itself and tax credits for its supporters.