Photo: Their 'Tax Freedom Day' is nowhere near as early as Corporate Income Tax Freedom Day, which fell in the second week of January
According to the Fraser Institute, ‘Tax Freedom Day’ was May 19 in 2020, the day when Canadians stop paying taxes and ‘start working for themselves’.
The right wing organization said Tax Freedom Day came about a month earlier than last year as people are paying less income and sales tax due to the pandemic. But the reality is that the Fraser Institute exaggerates how much tax Canadians pay in their flawed methodology by including a whole range of other taxes, including corporate taxes and resource revenues in these calculations and by exaggerating how much taxes Canadian families pay in other ways. This year they excluded resource revenues which set their “tax freedom day” back a few days.
Still, their tax freedom day is nowhere near as early as Corporate Income Tax Freedom Day, which fell in the second week of January, according to a report Canadians for Tax Fairness produced earlier this year. This shows how much taxes have shifted away from corporations and towards individuals.
Our report found that Canadian corporations could have paid all their federal and provincial corporate income taxes out of their revenues for the year before 9 a.m. on January 7. Corporate income taxes accounted for an average of just 1.75% out of their annual operating revenues --less than a week’s worth!
Corporations have paid considerably less in taxes thanks to decades of cuts to corporate tax rates and complicated tax loopholes that benefit the largest companies and wealthiest executives. While these tax breaks were promised to create investment and jobs, they have instead contributed to increased corporate concentration, reduced spending for critical public services such as healthcare, and worsened inequality.
The Institute doesn’t acknowledge that taxes are what keep our society functioning, both in good times but especially in crises like this one. Taxes fund the healthcare, research, infrastructure, and public services that are keeping our communities safe right now. Analysis by the Canadian Centre for Policy Alternatives found that the value of benefits provided by public services amount to about 63% of average household incomes. This would put “benefits of public services day” in mid-August.
Listen to an interview with Canadians for Tax Fairness director Toby Sanger debunking last year’s Tax Freedom Day report.