The public finally got a glimpse at one of Donald Trump‘s tax returns, and the findings struck some as underwhelming.
In 2005, Trump made about $150 million, reported business losses of $100 million, and paid 24 per cent tax — $36.3 million.
The 24 per cent is higher than the roughly 10 per cent the average American pays each year – but below the 27.4 per cent that taxpayers earning $1 million a year average, according to data from the Congressional Joint Committee on Taxation.
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So how much would someone with Trump’s income pay in Canada? Well, it depends on where exactly you live and how creative you are with your money.
In Canada, the base tax rate is much higher — for example, in Ontario the combined federal and provincial tax rate is roughly 54 per cent — but many people in the top tax bracket don’t actually pay that amount.
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People making that kind of money usually have a team of professionals working with them, “to optimize the tax situation,” said Maria Severino, tax partner at Collins Barrow.
“To do tax planning and be able to minimize the overall tax burden. That’s very normal,” Severino said.
The Trudeau Liberals have boosted the federal tax rate for those in the top tax bracket — anyone earning more than $200,000. The personal combined provincial and federal tax rates range from 46 per cent to 53.5 per cent.
When Canadians are investing in a business venture, their taxes can drop dramatically.
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“There is the ability to lower taxes by having income go into a corporation,” said Severino.
“Or if they’re anticipating startup losses they may put it through a partnership and have those losses flow through personally to their return.”
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Currently, corporate tax rates in Canada are lower than in the U.S. In some states it can be as high as 40 per cent, in Canada it ranges from 31 per cent to as low as 26.5 per cent.
And some tax-filers are able to take full advantage.
If Trump lived in Ontario and had paid full tax, he’d have shelled out a hefty $81 million in taxes; at the lowest rate, around $39 million.
So how creative are Canada’s top income earners when it comes to their taxes? In 2014, Canada’s top one per cent of income earners made, on average, $466,700 and paid 34 per cent tax.
— With files from Global News and wire services
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