Gails Blog

Tax Freedom Day fell on June 14th this year. According to the Fraser Institute, this is the day in the year the average Canadian family has earned enough money to pay the taxes imposed on it by the three levels of government: federal, provincial, and local. Over the past few years it’s been coming earlier in the year, which means we’re putting less of our money in the government’s hands. Hmmm. You wouldn’t know it from all the different taxes we seem to pay. See Table 2.

Ever wonder where all the money the government takes from you goes? I bet you do. I did. So I went looking. The Tax Man has a website where he shows anyone who wants to know exactly where their money goes.

One of the first things I noticed when I looked through the presentation is that there’s supposed to be a new one every year, but the last one posted was for the year that ended in March 2006. So the March 2007 numbers have been available for a year, but no update. Hmmm.

Of the $222.2 billion the Tax Man collected, you won’t be surprised to learn that personal income tax was the biggest revenue source, raking in $103.7 billion. The hated GST brought in another $33 billion. Corporate income tax raised just over $32 billion, and other taxes such as non-resident taxes, customs import duties, energy taxes and excise taxes on alcohol and tobacco-made up $17.7 billion. Crown corporations brought in $19.6 billion. Employment insurance premiums, which are treated as part of general revenues, contributed $16.5 billion to federal finances.

This last income source is a travesty really since EI has a surplus of $54 BILLION. Either our premiums should be falling, or we should have some damn fine career counseling for people who are looking for work, or who want to increase their earning potential. Mind you, with the change in economic circumstances of late, there may be more pull on EI over the next year or two than we’ve seen in the past decade.

Another thing I noticed is that the government spent about 15% of the $222.2 BILLION it collected on interest payments on its debt. Hey, wait a minute! They’re breaking the rule that says we shouldn’t spend more than 15% on debt repayment, since their 15% just covers the interest. Shame! You’d think Big Daddy would know better.

About 23.5 cents of every dollar, or $52.6 billion, collected came back to us in the form of Old Age Security and income supplements, Employment Insurance, and cash to help with the cost of raising children.

The Feds gave the provinces about $41 billion – the infamous “Transfer Payments” – to help with funding health care, post-secondary education and other social services.

The government also had administration costs, eating up over a quarter of revenues raised. There are more than 130 departments, agencies, Crown corporations and other federal bodies that ate up $56.9 billion. Defense got the most: about 7 cents of every dollar for a total of $15 billion. The Department of Public Safety and Emergency Preparedness – including the Mounties, the federal prison system, and border traffic and security — gobbled 3 cents or $6.6 billion. The Tax Man gets about two percent of the pool or $4 billion to make sure we’re getting all our taxes paid on time.

Let’s see, what are we up to so far: Interest 15¢ plus 23.5¢ back to us plus about 18.5¢ on transfers to the provinces, plus 25.5¢ to administration costs. That’s 82.5% of revenue.

Just over 11 cents of your tax buck, or $24 billion, went to operations of federal departments and agencies such as Environment, Fisheries and Oceans, Health, Human Resources and Social Development, Industry, Justice, Natural Resources, Public Works, Transport, and Veterans Affairs. So now we’re up to about 93%.

While Crown corps brought in $19.6 billion in revenues for the government, they received 
$7.2 billion, which is a little over 3 cents of your tax dollar, with the majority of the money going to CMHC ($2.1 billion), CBC ($1.7 billion) and AECL ($.7 billion).

The remaining 6 cents of your tax dollars ($13.2 billion) was used to reduce the federal debt. Add that to the 15% the government is forking out in interest, and our leaders are spending 21% of their income on debt repayment.

Maybe I need to pay them a visit!

This entry was posted on Tuesday, June 17th, 2008 at 6:55 am and is filed under In the News, Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.