Calculating the benefit of taxes

CPJ believes that taxes are one way that we can contribute to the common good. But now a new study from the Canadian Centre for Policy Alternatives demonstrates that by paying taxes, we are also contributing to our own individual good.

The study, Canada’s Quiet Bargain: The benefits of public spending by Hugh Mackenzie and Richard Shillington, examines the benefits of public services paid by taxes. It finds that the average benefit received by public services is equivalent to $17,000. Most Canadians, in fact, receive benefits from public services that are greater than half of their household’s income. This is the case even up to the $80-90,000 household income range.

The flip side of this reality is that most Canadians would have been better off without recent tax cuts. The lost investments in public services are greater to three-quarters of Canadians than the amount of money they save in taxes. This is true for the GST cut, the capital gains tax cut, and broad-based cuts at the provincial level.

This study demonstrates the need to understand taxes in context, rather than being swayed by empty rhetoric of money in pockets and tax burdens.

The CCPA also offers a public spending calculator, to see how much your family benefits from public services.