Tax Freedom Day
Tax Freedom Day in Alberta is May 22, 2021
The Fraser Institute's annual study of the combined effect of all the taxes we pay is an insight into how much of our money goes to our financial partners in government. If we spent all of our money to pay taxes from the beginning of the year, we'd only start keeping our money in late May. The good news is that this has improved since the year 2000, when Tax Freedom Day was June 27. Yikes! Economists know that once we start paying more than half of our money in taxes, there's a negative effect on the economy as a whole. We all start thinking about leaving for somewhere else or are discouraged from working more since we keep so little.
If we were to factor in all that the government has spent in the last year of Covid, the Balanced Budget Tax Freedom Day (with enough to cover all that spending) would be July 7. There's no crystal ball to show us how that will all be covered, whether by economic growth, higher taxes or a combination of that and other factors.
This highlights the importance of tax planning to minimize your taxes paid each year. It can make a significant difference. Your friendly neighborhood accountant can help!
Just for interest sake, here is a list of all the taxes we pay either directly or indirectly in Canada:
GST and provincial sales taxes
Income taxes (federal and provincial)
Payroll taxes, such as CPP & EI
Licensing fees (like for vehicles etc.)
Natural resource fees
Profit taxes (on big companies)
Sin taxes (on tobacco & alcohol)