Blogs & Comment

Tax Freedom Day

June 14 is Tax Freedom Day, according to the Fraser Institute. People tend to interpret it as the day of the year the average Canadian family stopped working for the government. Another way of saying the same thing is that taxes in Canada represented about 45% of family income.
Yet, for most families, Tax Freedom Day actually came earlier, or, their taxes were a lower percentage of income than 45%. Thats because the median income of the Canadian family the income at the midpoint of the income distribution — is lower than the average income for all families (which is inflated by higher-income families receiving a greater share of national income). Since median income is lower and taxes are progressive in Canada, the average family paid less tax proportionately.
Also interesting are tax burdens by income classes. Freedom from taxes for low-income earners comes in February and for middle-income earners, in April. For high-income earners, Tax Freedom Day falls after June 14.