Lies, Damned Lies, And Statistics

We live in The Age Of Disinformation. That disinformation has found a comfortable home on the Right. Linda McQuaig writes:

If we end up with Pierre Poilievre as prime minister, it will be partly because of all the groundwork done by right-wing think tanks in distorting the public debate over taxes.

Most notably, the Fraser Institute, generously funded by wealthy interests, has been using its ample resources for decades to turn Canadians into tax-haters, to disconnect taxes in the public’s mind from all the benefits, services, programs and infrastructure that taxes provide. 

Key to promoting this anti-tax agenda has been grossly exaggerating the actual tax burden on Canadians.

So, for instance, a new report from the Fraser Institute last week proclaimed that the tax bill paid by Canadians has increased by 2,705 per cent since 1961.

Now, there’s a mind-bending number. But it’s also a meaningless number, in that it fails to take into account inflation and the real increase in Canadian incomes over the past 63 years.

When these two factors are taken into account, we discover that taxes have increased 28% in 63 years:

Now, we could have a reasonable debate about whether a 28 per cent increase in the tax rate over six decades is too high. But we should start by acknowledging that government today provides a lot more benefits than it did in 1961 — most notably, universal health coverage and old age pensions — major programs that have become essential to the well-being and financial security of Canadians.

The Fraser Institute’s new report also claims that the average Canadian family pays total taxes of $46,988, which it says amounts to an average tax rate of 43 per cent.

But don’t be fooled by that word “average.” In doing its calculations, the Fraser report lumps all Canadians together — including rich Canadians, whose incomes and taxes distort the picture. (Although effective tax rates on the very rich are lower than on most Canadians, they receive a disproportionately large amount of the nation’s income and so pay more tax.)

As the old joke goes: if Bill Gates walks into a bar crowded with homeless people, the average net worth might rise to, say, $500 million. This “average” could lead us to believe that the people in the bar are very prosperous when, in fact, they’re all penniless, except Bill Gates who has $130 billion.

In The Age of Disinformation, the sources of information are of paramount importance. Mr. Poilievre's sources can't be believed. Neither can he.

Mark Twain was right. There are lies, damned lies, and then there are statistics.

Image: Paul Daly The Canadian Press