Tag Archives: Federal

News

Average Canadian family spends 42% of its income on taxes

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Story here from the libertarian Fraser Institute.

Excerpt:

The total tax bill for the average Canadian family has increased at a much faster rate since 1961 than any other single household expenditure, according to a new study released today by the Fraser Institute, Canada’s leading public policy think tank. The Canadian Consumer Tax Index 2010, which calculates the total tax bill of the average Canadian family, found that taxes have increased by a whopping 1,624% since 1961. In contrast, expenditures on housing increased by 1,198%, food by 559%, and clothing by 526% from 1961 to 2009. “Taxes have grown much more rapidly than any other single expenditure item for Canadian families to the point where taxes from all levels of government take a greater part of a family’s income than basic necessities such as food, clothing, and housing,” said Niels Veldhuis, the study’s co-author and the Institute’s senior economist.

How much do Canadians pay in taxes?

The Canadian Consumer Tax Index calculates the total tax bill of the typical Canadian family by adding up the various taxes that the family pays to federal, provincial, and local governments. These include direct taxes such as income taxes, sales taxes, Employment Insurance and Canadian Pension Plan contributions, as well as “hidden” taxes such as import duties, excise taxes on tobacco and alcohol, amusement taxes, and gas taxes.

This year’s index shows that even though family incomes have increased significantly since 1961, the total tax bill has increased at a much higher rate.

  • In 2009, the average Canadian family earned an income of $69,175 and paid total taxes equaling $28,878-41.7 per cent of its income.
  • In 1961, the average Canadian family earned an income of $5,000 and paid $1,675 in total taxes-33.5 per cent of its income.

Taxes have become the most significant item that Canadian consumers now face in their budgets,” Veldhuis said.

So the typical Canadian family, pays 42% of their family income in taxes. FORTY-TWO PERCENT. Remember, Canada has a VAT tax, which is what Obama is apparently considering to pay for all his spending on bailouts for his rich Democrat buddies.

The Fraser Institute is the equivalent of our Cato Institute. I don’t agree with either of them on many things, (e.g. – Darwinism), but on the topic of taxes being too high, I agree with them both.

Commentary

Walter Williams advocates a return to federalism

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Walter Williams

A popular editorial from Investors Business Daily.

Here is the question he wants to answer:

If one group of people prefers government control and management of people’s lives and another prefers liberty and a desire to be left alone, should they be required to fight, antagonize one another, risk bloodshed and loss of life in order to impose their preferences or should they be able to peaceably part company and go their separate ways?

The problem is that the federal government is not supposed to tell the states what to do. Every state is supposed to decide how much to tax and what government programs to spend on for themselves.

He continues:

Article I, Section 8 of our Constitution lists the activities for which Congress is authorized to tax and spend. Nowhere on that list is authority for Congress to tax and spend for: prescription drugs, Social Security, public education, farm subsidies, bank and business bailouts, food stamps and other activities that represent roughly two-thirds of the federal budget.

[…]James Madison, the acknowledged father of the Constitution, explained in Federalist Paper No. 45: “The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce.

Williams ends by hoping for a restoration of respect for the Constitution. That would mean that the Democrats, (the party that advocates top-down control of other people’s lives), would have to be voted out of power.

Walter Williams is my second favorite living economist. Thomas Sowell is still number one, and he has the most popular post on National Review right now.

Commentary

Can we tax the rich enough to pay for all of Obama’s spending?

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The libertarian Cato Institute says no way. (H/T ECM)

Excerpt:

Funding the new health-care plan on the backs of households making $200,000 or more per year would require permanently increasing their annual total tax payments by about 50 percent. So, for example, a household that currently pays $50,000 in federal income taxes would need to pay another $25,000. Remember, however, that Social Security and Medicare already face enormous shortfalls. Shoring up these programs — another Obama campaign promise — would require collecting 328 percent more tax revenue from the rich. No, we didn’t forget a decimal point: That is three hundred and twenty-eight percent.

And what follows from taxing the rich?

[…]A major tax increase causes the tax capacity of the rich to shrink gradually as two factors kick in. First, many of the households falling into Obama’s “rich” definition are married couples in which both partners are working professionals. When tax rates rise, the lower-earning spouses in these couples tend to work less. Often, they quit work entirely. Second, many of the “rich” are budding entrepreneurs and small-business owners. They finance their operations using their own after-tax income, or with after-tax resources from family and friends. Small-business innovation is the fuel for long-term economic growth. In fact, many of the largest companies in the United States today were either small or nonexistent just 25 years ago. Killing small business kills the American economy.

Why do ivory tower socialists like Obama seem incapable of thinking through the consequences of his utopian policies for all parties concerned? You can’t assume that people are just going to sit there and let you rifle through your pockets to redistribute their money to everyone who voted for you.

(By the way, if you are thinking that “preventative care” will cut medical costs, think again. The CBO says no way.)