“A Public Opinion Poll Is No Substitute for Thought” -Warren Buffett
Energy Lifts TSX at End of Volatile Week
Energy stocks, buoyed by a jump in oil prices, led the TSX to close higher Friday, but U.S. stocks were mixed after a two-day rally following comments by a top Federal Reserve official that appeared to suggest that a September rate rise was still possible. The S&P/TSX composite index rose 98.40 to 13,865.07 points, after gaining 385 points on Thursday as the price of oil jumped 10 per cent. Oil rose again Friday, up 6.7 per cent or $2.87 to $45.43 (U.S.), far off its lows earlier the week near $38. The TSX energy sector jumped 5 per cent, followed by a 3 per cent rise in the materials sector. The Canadian dollar was down 0.08 of a U.S. cent to 75.66 cents (U.S.).
The Dow Jones industrial average wavered, dipping 11.76 points to 16,643.01. The S&P 500 index rose in the final minutes of trading to gain 1.21 points to 1,988.87. The Nasdaq composite added 15.62 points to 4,828.33. U.S. Fed vice-chairman Stanley Fischer said the United States was heading in the direction of higher rates and that recent economic data had been impressive. Data released on Friday showed U.S. consumer spending picked up a bit in July as households bought more automobiles, offering further evidence of strength in the economy.
Canadian Families Spend More On Taxes Than Necessities
The average Canadian family spends more on taxes than on food, clothing and shelter combined, finds a study by the Fraser Institute. “Over the past five decades, the tax bill for the average Canadian family has ballooned. The amount of money going to taxes is greater than what’s spent on life’s basic necessities,” says Charles Lammam, director of fiscal studies at the Fraser Institute. In 2014, the average Canadian family earned $79,010 and paid $33,272 in total taxes — compared to $28,887 on food, clothing and shelter combined. In other words, 42.1% of income went to taxes while 36.6% went to basic necessities.
This represents a marked shift since 1961, when the average family spent 33.5% on taxes and 56.5% on food, clothing and shelter. The total tax bill reflects both visible and hidden taxes that families pay to the federal, provincial and local governments, including income taxes, payroll taxes, sales taxes, property taxes, health taxes, fuel taxes, alcohol taxes, and more. Since 1961, the average Canadian family’s total tax bill increased by 1,886%, dwarfing increases in annual food costs (561%), clothing (819%) and shelter (1,366%). Even after accounting for inflation over the 53-year period, the tax bill shot up 149.2%. “While taxes help fund important government services, the issue is the amount of taxes that governments take compared to what we get in return. With 42% of income going to taxes, Canadians might wonder whether they’re getting the best value for their tax dollars,” he adds.
Sources: Bloomberg; Investment Executive; advisor.ca