Question: It is common to read articles in the newspapers by people who think Canadians pay too much in taxes. One popular concept is tax freedom

It is common to read articles in the newspapers by people who think Canadians pay too much in taxes. One popular concept is "tax freedom day," the day in the year beyond which you get to keep your income rather than pay it to the government as taxes. For example, if the government collects 33 percent of GDP in taxes, then "tax freedom day" is the 122nd day of the year, May 2.
a. Does everyone in the economy have the same tax freedom day, no matter what his or her income?
b. How sensible is the concept of "tax freedom day" in a country where the government provides some goods and services to the people that they would otherwise purchase on their own, such as primary education and health-care services?

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a The overall tax freedom day is determined by the overall average tax rate where we compute the ave... View full answer

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