May 19, 2020 is Tax Freedom Day

Tax Freedom Day is the day in the year when the average Canadian family

has earned enough money to pay the taxes imposed on it by all three levels of

government (federal, provincial, and local).This year Tax Freedom Day falls on May 19th.

This means that if Canadians had to pay all their taxes up front,

they would have to pay each and every dollar they earned to governments prior to

Tax Freedom Day, when they finally start working for themselves.

Ordinarily Tax Freedom Day comes much later in the year—last year it fell on June 8th—but,

an earlier Tax Freedom Day this year is nothing to celebrate since it's

not the result of governments reducing taxes. Instead, Canadian families have been

significantly affected by the economic shutdowns in response to COVID-19.

When the economy slows and incomes decline, Canadians are bumped into lower income tax brackets

and pay a smaller percentage of income in taxes. Canadians

have also reduced their spending, which means less sales taxes are paid.

And Canadians should also be worried about the tax implications of the more than

$300 billion dollars in deficits our governments are running this year.

These unprecedented deficits will have to be paid eventually by Canadian taxpayers

in the form of higher taxes. So, in order to see how these deficits will affect

Tax Freedom Day in the future, we calculated a Balanced Budget Tax Freedom Day,

the day of the year when average Canadians would start working for themselves if

governments were obliged to cover current spending with current tax revenues.

In 2020 the Balanced Budget Tax Freedom Day won't arrive until July 26th!

That's another reason there's little to celebrate this Tax Freedom Day.

For more information, visit FraserInstitute.org