Marc travels to Jamaica. The plane ticket costs $1600
dollars. Taxi to the airport costs $100, and a whole set of new clothes and
sunglasses cost $350. That's $2050 for the whole trip. There is 13% HST on
everything, so Marc has to pay $266 in tax. The actual cost of his trip then is
$2316.
When Marc is in Jamaica, he buys a new leather jacket. The
same jacket is available in Canada for $500 plus tax. In Jamaica the jacket
sells for $500 with no tax. There is no sales tax in Jamaica.
When Marc returns home, the airport officials at the border
ask him if he bought anything in Jamaica. He declares that he bought the coat
fro $500. The airport officials ask for a 13% tax payment on the coat, and Marc
is told to pay $65 before he leaves the airport.
Alice wants to buy a truck. The truck costs $30 000 in
Ontario. At 13% tax, the truck actually costs $33 900. Alice and her husband
decide to drive to the US and buy the truck to save on tax. She drives to
Vermont with her husband, buys the truck for $30 000. In Vermont there is 5% sales
tax, so Alice actually pays $31 500 for the truck. She and her husband drive
back to Ontario separately. At the border Alice is asked if she bought anything
in the US. She says she bought the truck, and Alice is asked to pay 8% tax
before she can continue on her journey. In the end she pays, all in all, $33
900 for the truck.
Stephanie earns $100 a week working at McDonalds. Her income
tax rate is 5%. She gets $95 on every paycheque, with the extra $5 going to the
government. Stephanie's cousin, Amanda, earns $100 000 a week working at
Google. She pays 40% tax because she earns so much. Amanda actually gets $60
000 on every paycheque, and pays $40 000 in taxes. Amanda's boss, Morgan, earns
$2 000 000 a week as a vice president at Google. She needs to pay 70% in tax.
Morgan thinks this is outrageous because she has to pay $1 400 000 every week
in taxes. But Stephanie doesn't think it's outrageous at all, because Stephanie
knows that Morgan still takes home $600 000 every week.
Apple earns $10 000 000 every month. They need to pay 35% in
corporate taxes. They pay, therefore, $3 500 000 every week in taxes. Donna's
express makes $1000 dollars every month.
What should Donna's express pay in taxes?
10% - $100 in taxes with $900 profit.
20% - $200 in taxes with $800 profit
35% - $350 in taxes, like Google, with $650 profit.
