What’s Your Largest Household Expense? A New Report Says It’s Taxes
When most families calculate their household expenses, they consider things like food, clothing and the most significant expense for most, housing. According to a new Fraser Institute Report, the largest one is actually tax payments.
“Many Canadians may think housing is their biggest household expense, but in fact the average Canadian family spent more on taxes last year than on life’s basic necessities – including housing,” said Charles Lammam in a release.
Lammam is the director of fiscal studies at the Fraser Institute, a public policy think-tank in B.C., and co-author of the Canadian Consumer Tax Index, which tracked the total tax bill of the average Canadian family from 1961 to 2016.
According to the 2016 figures analyzed by the report’s authors, the average Canadian family earned $83,105 in income and paid $35,283 in total taxes. It spent $31,069 on housing, food and clothing combined.
It has not always been the case that tax bills were that much higher than other household expenses. In 1961, the average family spent much less on taxes (33.5 per cent) than on food, clothing and housing (56.5 per cent).
The report’s numbers reflect both visible and hidden taxes that families pay to the federal, provincial and local governments, including income, payroll, sales, property, carbon, health, fuel and alcohol taxes.
Lamman acknowledges that taxes pay for necessities like health, education and fire and police protection services, but he said Canadians should question whether they’re paying too much for the services they receive.
“Taxes help fund important public services that Canadians rely on, but the issue is the amount of taxes governments take compared to what Canadians get in return,” he said. “With more than 42 per cent of their income going to taxes, Canadians might ask whether they’re getting good value for their tax dollars.”