Today June 6, 2011 is Tax Freedom Day in Canada

Today, average Canadian family has earned enough money to pay the taxes imposed on them by the three levels of government, i.e. federal, provincial and local. This year, average Canadian family will earn $93, 831 in gross incomes and will pay tax of $39, 960 in taxes. Average taxes paid in 2011 will be 42.6% of average income.

Tax freedom day is different for each Province, depending on the provincial part of tax rate. This year the earliest provincial Tax Freedom Day fell on May 18th in Alberta and the latest date will be in Newfoundland and Labrador on June 19th.

Tax Freedom Day is the day in the year by which the average Canadian family has earned enough money to pay the taxes imposed on it by the three levels of Canadian. In other words, if Canadians were required to pay all of their taxes up front, they would have to pay each and every dollar they earned to government prior to Tax Freedom Day.

Taxes used to compute Tax Freedom Day include income taxes, property taxes, sales taxes, profit taxes, health, social security and employment taxes, import duties, license fees, taxes on the consumption of alcohol and tobacco, natural resource fees, fuel taxes, hospital taxes and a host of other levies.

It is important to note that Tax Freedom Day is not intended to measure the benefits Canadians receive from governments in return for their taxes. Rather, it looks at the
price that is paid for a product government. Tax Freedom Day is not a reflection of the quality of the product, how much of it each of us receives, or whether we get our
money’s worth. These are questions each of us must answer for ourselves.