From: canada.revenueagency@yahoo.com   
      
   Canadians spend more on taxes than food, shelter: Fraser Institute : CRA SOTW   
      
   CBC News    
      
   The average Canadian family spends more on taxes than on food, shelter and   
   clothing combined,a new study released today by the Fraser Institute, a   
   Canadian public policy think-tank that focuses on free markets and government   
   policies targeting consumers.    
      
   "If you asked people to name their household's biggest expense, many would   
   likely say housing, but in reality, the average Canadian family spends more on   
   taxes than all basic necessities including housing," the report's author   
   Charles Lammam said of the    
   paper, which tracks the total tax bill of the average Canadian family from   
   1961 to 2013.   
      
   In 2013, the study says the average Canadian family earned $77,381 and paid   
   $32,369 in total taxes (or 41.8 per cent of income) compared to 36.1 per cent   
   for food, shelter and clothing combined, the paper found.   
      
   By comparison, in 1961, the average family earned approximately $5,000 and   
   spent much more of its income on food, shelter and clothing (56.5 per cent),   
   while $1,675 went to taxes (33.5 per cent).    
      
   But not everyone agrees with the Fraser Institute's analysis. "Those numbers   
   are not directly comparable," said Peter Dungan, an economist at the Rotman   
   School of Management. "First, in 1961 we did not have medicare," he said. The   
   report's starting year    
   baseline begins in 1961, the first year that the federal government started   
   paying for a national health-care plan, first known as medicare and later   
   brought under the umbrella of the Canada Health Act.   
      
   Moving the onus of health-care spending from individuals onto the state has   
   put a major cost on the backs of taxpayers along the way, which may be showing   
   up in the Fraser Institute's report. According to recent numbers by   
   consultancy Mercer, health-care    
   spending was less than $100 per person in the early 1960s, 57 per cent of   
   which was covered by government. But by 2010, per capita health spending had   
   jumped to $5,614, of which 70 per cent was paid for by Ottawa.   
      
   Other big ticket items such as the Canada Pension Plan and Old Age Security   
   didn't even exist in 1961.   
      
   Dungan points to higher education as another factor that needs to be taken   
   into consideration.  "At that point, many Canadians did not even finish high   
   school, let alone go to university or college.... Part of what's included in   
   the increase in taxes, is    
   an increase in educational taxes."   
      
   Other criticisms   
      
   Canada's booming oil and gas industry over the past 50 years is also a factor.   
   "Included in those government revenues are royalties on oil and gas, which   
   were not nearly as high then," said Dungan. He added that in addition to   
   taking inflation into    
   consideration, analysts must also consider the relative price of oil and gas   
   as well as the sheer amount that Canada exports today. "The Fraser Institute   
   counts those as taxes."   
      
   Dungan adds that we should also take into consideration that, relatively   
   speaking, food has become less expensive, and many consumer goods are   
   less-expensive imports.   
      
   "The report is very misleading," said Iglika Ivanova, economist at the   
   Canadian Centre for Policy Alternatives. "It grossly overestimates the tax   
   bill of the average Canadian family because of their methodology. They include   
   things such as business taxes    
   and import duties in the bill of the average family.   
      
   "There is lots of research, mainly from the US, that business tax is largely   
   paid by shareholders, little is paid by workers ... the average Canadian   
   family is not a large shareholder," said Ivanova.   
      
   Lammam says it is fair to include business taxes because those taxes trickle   
   down to Canadian families in the form of reduced wages, higher prices and   
   lower investment returns.   
      
   "Corporations are pieces of paper, but it's regular people that pay these   
   taxes," he said in an interview with the CBC on Tuesday.   
      
   The Fraser Institute's measure of an "average Canadian" is also flawed, says   
   Ivanova. "We need to look at the distributional issues as to who is paying for   
   what. Averages are becoming less and less meaningful. What does it mean when   
   you have such large    
   disparity? ... We've eroded tax fairness. This is a much bigger concern for me   
   versus the size of the tax bill."    
      
   Rising tax burden   
      
   All in all, the report's total tax bill represents both visible and hidden   
   taxes paid to the federal, provincial and local governments. This includes   
   income taxes, payroll taxes, health taxes, sales taxes, property taxes, fuel   
   taxes, vehicle taxes,    
   import taxes, alcohol and tobacco taxes, and more.   
      
   Since 1961, the average Canadian family's total tax bill has increased by   
   1,832 per cent, dwarfing increases in shelter costs (1,375 per cent), clothing   
   (620 per cent) and food (546 per cent).   
      
   "Over the past five decades, the total tax bill grew much faster than the cost   
   of basic necessities, so now taxes eat up more income than any other single   
   family expense. With more money going to the government, families have less to   
   spend on things they    
   care about, to save for education and retirement, and to pay down household   
   debt," Lammam said.   
      
   Even after accounting for changes in overall prices (inflation) over the   
   period, the tax bill shot up 147 per cent.   
      
   "While there's no doubt that taxes help fund important government services,   
   the real issue is the amount of taxes that governments take compared to what   
   we get in return. With almost 42 per cent of income going to taxes, Canadians   
   should ask whether they    
   get the best value for their tax dollars."   
      
   The Institute has also produced a short, animated video that graphically shows   
   how the average family's tax bill has changed.   
      
   With files from The Canadian Press   
      
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