After Monday, Canadians start working for themselves – at least, that’s according to the Fraser Institute.
May 24 has been calculated as tax freedom day in Canada by the think-tank group. That means the total income made to this date by the average household of two or more people matches their total taxes to be paid in 2021.
That amount – charged by federal, provincial and municipal governments – equates to $48,757, roughly 39.1 per cent of the average annual household income of $124,659.
“This year, Tax Freedom Day arrives a week later than last year because of the increase in tax revenues forecasted by Canadian governments in 2021,” Jake Fuss, senior economist at the Fraser Institute, said in a release.
Indications suggest Canadians can expect that date to move farther into the calendar, the institute writes, as the $233.5 billion budget deficits the federal and provincial governments are running for 2021 lean heavily on taxes being deferred into the future.
Given those numbers, the Fraser Institute calculated balanced budget tax freedom day to be July 7. Such a hypothetical scenario determines the date Canadians would start working for themselves if the various levels of government paid for their spending with tax money collected this year.
“Future generations of Canadians will have to pay significantly higher taxes for the unprecedented deficits governments across Canada are running,” Fuss said.
Taxes payable used for the calculations include those on income, payrolls, health, sales, property, fuel, carbon output and more.
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