Top 20% of Canadian income-earning families pay more than half of all taxes

CALGARY—The top 20 per cent of income-earning families pay more than half (54.7 per cent) of total taxes including personal income, sales and property taxes, according to a new study published by the Fraser Institute, an independent non-partisan Canadian think tank. “Despite the common misperception that top earners don’t pay their ‘fair share’ of taxes, in reality these households pay a disproportionately large share of the total tax bill,” said Tegan Hill, economist at the Fraser Institute and co-author of Measuring Progressivity in Canada’s Tax System.

The key to understanding ‘fairness’

The key to understanding ‘fairness’ is comparing the share of income earned by one group compared to their share of total taxes paid. By this objective measure, the top 20 per cent of income-earning families is the only group to pay a disproportionate share of the total tax burden compared to their share of income earned. Specifically, the study finds that the top 20 per cent of income-earning families pay a larger share of total taxes (54.7 per cent) than their share of income (44.1 per cent). “While the top 20 percent earn a large share of total income at 44.1 per cent, they pay an even higher share of total taxes (54.7 per cent)” commented Jake Fuss, senior economist at the Fraser Institute and co-author of the study. Conversely, the bottom 20 per cent of income-earning families pay 2.3 per cent of total taxes, due partly to the progressivity of Canada’s personal income tax system but earn 5.5 per cent of the total family income in Canada. “The assertion that the top 20 per cent of earners in Canada are not paying their fair share is simply not supported by the evidence,” commented Fuss. Media Contact: •Jake Fuss, Senior Economist, Fraser Institute •Tegan Hill, Economist, Fraser Institute To arrange media interviews or for more information, please contact: Drue MacPherson, Fraser Institute drue.macpherson@fraserinstitute.org