Tuesday, April 12, 2005

Tax Freedom Day: Canada and U.S Comparison

I found these charts showing the differences in tax freedom day within both the U.S and Canada. The Tax Foundation has their charts showing the tax freedom day by state. As you know, tax freedom day is the day of the year when one stops working for the government and starts working for oneself. To put it another way, it shows the overall tax burden of a jurisdiction (including property, sales, excise taxes and what not) as a portion of one's working year. The Fraser Institute has one for Canada by province and by time. My current place of residence, Michigan, has a tax freedom day of April 15th (what a coincidence, the date personal income tax returns are due). My former place of residence, Ontario, has a tax freedom day of June 27th. Two things come to mind:

  1. I can't believe it is that big a differential. Over two months! In 1981, tax freedom day in Ontario was May 29th (per the Fraser Institute), while in Michigan in 1980 (per the Tax Foundation) it was April 22nd. No wonder Canadian real wages have stagnated. Their overall tax burden is up roughly 50% in terms of the incremental time/effort needed to pay "the man" his piece of the action. And that is in real terms, by measuring in terms of output (days of labour).
  2. Considering that most Canadians are paying half their total income to all levels of government, it is appalling how little value one gets for it (unless you own a Liberal friendly ad-firm in Montreal)
If you the biggest reason for the economic disparities between Canada and the U.S. Those two dates can explain a lot of it.


Brianron said...

I spent Sunday in London for a First Communion so I had an opportunity to speak to some Canadians about politics and life. To me, the interesting subject was the Liberals' problem with the Quebec advertising fiasco and the possibility of another election this summer.

No wonder the tax burden is so high. You've got the government spending a bunch of money for "Canada" signs in Quebec, as if that is going to convert any of those thinking separation to thinking about Canada. Ab-fricking-surd.

Equally absurd is the possibility of an election being called barely a year after the last one. I have no idea how much money an election costs the government, but surely it is money spent better elsewhere (Like maybe for more people to work the booths coming into Canada at the Bluewater Bridge. What is the use of having 12 booths and then having no more than 6 ever open?)

Sure, the Canadians I spoke with laughed about the U.S. spending $100 billion on Iraq, but at least a new democracy may result. The only thing the advertising in Quebec did is create more hard feelings and create more separatists.

Mitch said...


FYI - this time of the year don't cross at bluewater - cross at the Marine city ferry over to Sombra - less of a delay that way.

Brianron said...

We have used the ferry many times during the summer if we are crossing during peak times (Friday p.m. or Sunday p.m.) The Customs station on the U.S. side is sooo ludicrous. As if Andy Taylor and Barney Fife in Mayberry set up the site in an old gas station. I don't mean to demean the border guards there, but it just looks so hick-like.