Fraser Institute report says average Canadian families spend more on taxes than necessities
But Canadian Centre for Policy Alternatives argues higher taxes provide needed services
The average Canadian family spends more on taxes than on food, clothing and shelter, says a new study from the Vancouver-based Fraser Institute.
"Taxes now eat up more family income so families have less money available to spend, save or pay down household debt," said Charles Lammam, the institute's director of fiscal studies, in a statement.
"Over the past five decades, the tax bill for the average Canadian family has ballooned, and now the amount of money going to taxes is greater than what's spent on life's basic necessities," Lammam added.
He is the co-author of the think tank's Canadian Consumer Tax Index, which tracked the total tax bill of the average Canadian family from 1961 to 2014.
That index showed that last year, the average Canadian family spent 42.1 per cent of its income on taxes and 36.6 per cent on basic necessities. The average family made $79,010 and paid $33,272 in total taxes while spending just $28,887 on food, clothing and shelter combined
Canadian tax bills have soared, group says.
Since 1961, the average Canadian family's total tax bill has increased by 1,886 per cent, outpacing increases in food, clothing and shelter, according to the index.
However, an economist with the Canadian Centre for Policy Alternatives, a self-described progressive research group, said the report failed to mention how families — and society in general — benefit from taxes. Iglika Ivanova said those taxes pay for health care and education and other social services, meaning Canadians don't pay for these services out of pocket.
Ivanova also argued that it's not a bad thing if families aren't paying the bulk of their incomes on basic necessities.
"Who spends most of their income on food, shelter and clothing?" she asked. "People in poor countries."