Top 20% of Canadian Earners Pay Over Half of All Taxes, Study Finds

A recent report from the Fraser Institute reveals that high-income families in Canada contribute a disproportionate share of the country’s tax revenue. The study, titled “Measuring Progressivity in Canada’s Tax System, 2024,” found that the top 20% of income-earning families pay 62.7% of all personal income taxes and 54.2% of total taxes in the country.

This data challenges the common perception that wealthy Canadians don’t pay their fair share. 

According to the report, the top quintile of earners is the only income group that pays a larger percentage of total taxes than their share of income earned. While this group earns 46.4% of total family income, they pay 54.2% of all taxes.

In contrast, the bottom 20% of income earners pay just 2.0% of total taxes while receiving 5.0% of total income. The study attributes this disparity largely to Canada’s progressive tax system, where tax rates increase with income levels.

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Jake Fuss, director of fiscal studies at the Fraser Institute and co-author of the report, emphasized that these findings contradict the notion that top earners are not contributing their fair share to the tax system. 

“While the top 20 percent earn a large share of total income at 46.4 per cent, they pay an even higher share of total taxes (54.2 per cent)” said Fuss. “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.”

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The study also cautions against further tax increases on high-income earners, suggesting such moves could lead to unintended economic consequences and potentially reduce government revenue due to behavioral responses from taxpayers.

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