Ottawa facilitates tax evasion, while crying "foul"!

...once a tax haven country has signed one of these (largely useless) bilateral treaties, it qualifies for special treatment under the new Harper rules, allowing multinational corporations to route their profits through the tax haven, thereby avoiding Canadian corporate tax. (from "Harper government’s fraudulent attempt to look tough on tax havens: McQuaig" Toronto Star, April 9, 2013, excerpted below)
Facilitating, aiding, abetting and turning a blind eye toward the very behaviour it says it abhors, by the Harper government, is just one more sign of the kind of co-dependent relationship that exists between the government and the people/organizations/corporations that hold the money. The government is extremely aware of how the public generally views tax havens and their growing use, linked to the growing pressure such tax havens are placing on national governments everywhere; however, their public stance, in sympathy with a "cease and desist" approach is clearly in conflict with their core values, and their core allegiances.
Saying 'we are appalled by the abuse of the tax collector by these rogue actors who park their money where it cannot be taxed' and then facilitating the very 'parking' of that money by creating bilateral treaties that permit the act is nothing short of the kind of hypocrisy which is the signature of the current Canadian government.
However, they also know, those wily foxes who currently run Ottawa, that the level of public outcry about this kind of billion dollar abuse of the national accounting and budgeting function, thereby requiring the need for austerity, and for cuts in government payroll, especially in the very office, the Canada Revenue Agency responsible for pursuing tax evaders, will be so low as to barely make it on the radar screen of public opinion polls.
So, in effect, the government is counting on the sheep to continue eating their (our) meager farm food, while we pay to little attention to the charade that unfolds before our eyes.
And so while the government should be covered with appalling shame and embarrassment, it is we, the 'sheep' in this little drama who are covered with our own shame of unconsciousness.


Harper government’s fraudulent attempt to look tough on tax havens: McQuaig


Rules are so poorly designed they’ve been useless in making it harder for Canadians to hide money offshore.

By Linda McQuaig, Toronto Star, April 9, 2013 Tax havens have grown explosively in the last few decades, but last week’s spectacular leak of tax haven documents could mean the jig is about to be up.

The documents provide details of offshore accounts held by tens of thousands of corporations and individuals — all from just two of the more than 50 tax havens, which hold an estimated $32 trillion in offshore money.
The stunning disclosure puts considerable pressure on governments to finally show some muscle against their tax-evading citizens.
With 450 Canadians identified — and estimates of an annual revenue loss of $8 billion from tax havens, according to Canadians for Tax Fairness — even the Harper government could be obliged to overcome its reluctance to go after wealthy cheats.
Ironically, the Harperites like to present themselves as tough on evaders — an image they pumped up in last month’s budget, introducing a turn-in-a-tax-cheat snitch line.
And back in 2007, the Harper government launched a campaign to push tax haven countries to sign bilateral tax treaties with Canada, ostensibly to force them to divulge information about offshore accounts held by Canadians.
In reality, the treaty rules were so poorly designed they’ve been virtually useless in making it harder for Canadians to hide money offshore.
On the contrary, they’ve actually opened the floodgates to tax haven use. That’s because, once a tax haven country has signed one of these (largely useless) bilateral treaties, it qualifies for special treatment under the new Harper rules, allowing multinational corporations to route their profits through the tax haven, thereby avoiding Canadian corporate tax.
For the Harperites to claim they’re clamping down on tax havens would be like claiming a clampdown on bank robberies by setting up a turn-in-a-robber snitch line, while at the same time providing robbers with instruction manuals on cracking safes.
If the Harper government had any genuine interest in tackling tax havens, it would get behind growing global efforts to shut them down. Even the U.S. Congress passed a sweeping law, to take effect next year, requiring foreign banks to report all assets held by their U.S. clients to U.S. tax authorities.
A plan to develop an international system along these lines, long championed by the U.K.-based Tax Justice Network, has fresh momentum in the wake of last week’s revelations.
Such a system would be similar to — and no more complicated than—the international system of passports. All governments identify everyone entering their country when the person’s passport is electronically scanned at the border. Similarly, all banks could electronically report all their clients’ accounts to relevant tax authorities (as they already do domestically).
Tax haven users — who include a rogue’s gallery of money launderers, fraud artists, embezzlers, organized criminals, drug and human traffickers, as well as wealthy tax-evading individuals and corporations — would then find it no easier to move money undetected around the world than to travel without a passport.
But why would our government bother supporting serious global efforts to eliminate a system that facilitates despicable crimes and robs national treasuries, when it can look tough by crossing its fingers and hoping to catch a few cheats with a snitch line?
Linda McQuaig is author, with Neil Brooks, of The Trouble with Billionaires: How the Super-Rich Hijacked the World and How We Can Take It Back. Her column appears monthly. lmcquaig@sympatico.ca



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