Tax Freedom Day

Article excerpt


One of the biggest propaganda coups of recent years is the Fraser Institute's annual Tax Freedom Day. Each year in early June, the Institute, a right-wing think-tank based in British Columbia, issues a press release informing Canadians of the approach of Tax Freedom Day. The Institute says that all the money the average family earns up until this day -- which fell on July 1, this year -- will end up in the hands of one tax collector or another. The money they earn after July 1, is the money they get to keep for their own personal use.

In making this year's announcement, Institute director Michael Walker said he hoped the Canadians would soon "go about arresting this seemingly inexorable proces which causes taxes to rise year in and out." To aid in this campaign the Institute is creating a National Tax Limitation Committee> a committee which is well-stocked with academics, economists and businessmen.

Every year the media takes the Institute's annual press release and prints it almost word for word. Walker usually is quoted as saying that on July 1 Canadians should not only be celbrating Canada Day, but freedom from taxation. This year was no different. The Canadian Press story on Tax Freedom Day which ran in the Winnipeg Free Press before the headline Taxman gets off Canadian backs july 1. The story, which is almost identical to the one CP distributed a year earlier, lets Michael Walker go on at great length about the increasing tax burden facing the average Canadian family. Neither this year's story or last year's story mentioned what this average family was supposed to earn in a year, but the 1990 story was accompanied by a chart which said the average family income in Canada in 1990 is $49,500.

This figure probably did not raise many eyebrows in the country's newsrooms. Many veteran journalists (if they are not working for private radio stations) are likely to be making close to that amount on their own> if their spouses work outside the home it is almost certain their family income will be considerable above this average. Reporters covering Tax Freedom Day are likely to feel a tinge of resentment, since they suspect their personal Tax Freedom Day is probably something like August 1.

Given this suspicion, it is not surprising that in writing about Tax Freedom Day most journalists adopt a tone which feeds the professional and middle class's growing sense that they are being overtaxed.

Which is, of course, the impression the Fraser Institute wants to foster.

The problem with all of this is of course that Tax Freedom Day is a completely misleading concept. The idea that Canadians pay half their salaries in tax naturally feeds theidea that we should seriously reduce government spending. If journalists were not so lazy and held captive by their middle class biases, they might ask some pressing questions about Tax Freedom Day.

Let's get back to the idea of an average family income -- it is a fairly meaningless concept. Most Canadian familes do not make anywhere near $49,500 a year. To go back to high school mathematics, an average is the figure you reach by dividing the total income by the total number of families. If a small group of families are earning considerably more than other families, it produces a misleading picture. …