Saturday, June 6, 2009

Happy Tax Freedom Day!

Well, better late than never...
VANCOUVER, BC—Tax Freedom Day falls on June 6 this year, meaning the average Canadian family had to work more than five months in 2009 to pay the total tax bill levied on them by all levels of government, according to the Fraser Institute’s annual Tax Freedom Day calculations.

If Canadians were required to pay all of their taxes up front, they would have to pay each and every dollar they earned to governments prior to Tax Freedom Day.
This year Tax Freedom Day falls three days earlier than 2008, when it was June 9. The latest Tax Freedom Day in Canadian history was in 2000, when it fell on June 24.

While the federal government recently provided some minor tax relief, most notably increasing the basic personal exemption for income tax as well as various new or expanded tax credits, and some provinces decreased taxes in 2009, Veldhuis points out that these actions are not the primary reason for the earlier Tax Freedom Day.

When the economy slows and incomes stagnate or decline, an average family’s tax burden tends to be reduced to a greater extent than its income. The reason for this accelerated decrease in the tax burden compared to income is the progressive nature of Canada’s tax system.
Canadians may be thinking about the economic and tax implications of the government’s recent return to budget deficits. Indeed, most federal and provincial governments are forecasting budget deficits for 2009. But today’s deficits must one day be paid for by taxes. Deficits should therefore be considered as deferred taxation. For this reason, the Fraser Institute calculates a Balanced Budget Tax Freedom Day, the day on which Tax Freedom Day would fall if governments were obliged to cover current expenditures with current taxation and were not able to defer any of the tax burden by running a deficit.

Under this scenario, Balanced Budget Tax Freedom Day arrives on June 25 – 19 days later than Tax Freedom Day.
Tax Freedom Day varies from province to province, depending on the taxation levels of provincial and local governments. Alberta continues to enjoy the earliest Tax Freedom Day on May 16, followed by New Brunswick on May 31, then Ontario on June 1. Next comes Prince Edward Island on June 3, followed by Manitoba (June 7), British Columbia (June 8), Nova Scotia (June 11), and Quebec on June 12. Newfoundland and Labrador has the second-latest Tax Freedom Day, June 16, surpassed only by Saskatchewan where Tax Freedom Day falls on June 20.
Considering the amount of wasteful spending (Federal program expenses have doubled in the last 10 years,) it's obvious that out of those 157 days a year that we work for the government, at least 57 (if not 78) are wasted. But then... we're saving jobs (at the cost of $200,000 each). Without our help, freelance artists without real talent or education would have to look for a job in a nearby fast food restaurant. Not to mention Canada's role in the world, of which we are so proud... And to think that after footing the bill for all that, we still have 57 cents on every dollar we earn left in our pockets - isn't that great?

So let us celebrate. How about this song? I believe it's the right tune to celebrate government's generosity... our expense.

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