Saturday, June 11, 2016

Different Folks, Different Rules

The Isle of Man tax avoidance scheme is nothing new. Linda McQuaig reminds her readers that Brian Mulroney cut the same kind of deal with the CRA:

The riveting image of the former prime minister accepting wads of cash from a notorious lobbyist — admitted by Mulroney under cross-examination at a 2009 public inquiry — was so eye-popping that it completely eclipsed another fascinating aspect of the story: the sweetheart tax deal Mulroney got from the Canada Revenue Agency after he failed to report the cash.

Although Mulroney had hidden the cash payments (totalling $225,000) from tax authorities for six years, his lawyers managed to cut a deal that allowed the former PM to avoid any fines or penalties, and only required him to pay half the taxes he would have paid if he’d obeyed the tax laws — laws that chumps like you and me are legally obliged to obey.

And the treatment of Mulroney wasn't exceptional -- for the wealthy:

The KPMG scam is undoubtedly just the tip of a gigantic tax-avoidance iceberg. Canadians for Tax Fairness, a labour-sponsored group, calculates Canada loses more than $7 billion a year in revenue due to wealthy individuals and corporations using tax havens.

Under the Harper government, this sort of tax avoidance by the rich tended to be viewed as a benign activity, a victimless crime, part of the notion that taxes are inherently bad. But, of course, that’s only true if you’re willing to go without schools, hospitals, roads, bridges, pensions and other public goods that require tax revenue.

The flourishing, highly lucrative tax avoidance business can also be blamed for the complexity of the tax system, so frequently bemoaned by right-wingers.

The folks Leona Helmsley called "the little people" have their taxes withdrawn with every pay cheque. It's their paper trail and they can't hide it. The wealthy have become very good at hide and seek. It's time the Trudeau government declared that different rules for different folks is no longer government policy. And the new policy has to have teeth. 



Toby said...

Some years ago Alex Doulis wrote Take Your Money and Run!. See here.

If you plug Take Your Money and Run! into Google you will come up with a lot of hits. The theme is very popular.

Lorne said...

I do worry, Owen, that our government is not especially serious about cracking down on these cheats - they identify too much with them. Otherwise, why announce to the world that the Isle of Man will be the CRA's first target?

Owen Gray said...

I'm increasingly worried, Lorne, that the faces have changed but the agenda hasn't. When politicians can be bought, we're all in trouble.

Owen Gray said...

A sad commentary, Toby. If citizenship is only about taxes, we've lost something precious.

Toby said...

Owen Gray said... , "If citizenship is only about taxes, we've lost something precious."

Agreed. It's a testament to the neo-liberal crowd that we are now consumers, not citizens.

Owen Gray said...

And political policies are test marketed like soap, Toby, to see if they'll sell.

The Mound of Sound said...

A few weeks ago I coined a new term "getting Mulroneyed" to describe this situation in which the revenue agents look the other way, refrain from prosecuting the wayward taxpayer, impose none of the normal penalties and settle for the outstanding principal and a token amount of interest. Getting Mulroneyed is reserved for the affluent and well connected. It is not available to ordinary working stiffs by virtue of their low birth. The plebs will continue to be prosecuted, assessed massive penalties and full recovery. We simply cannot be having the underclass getting airs of entitlement and privilege.

Owen Gray said...

Two years ago, our youngest son did not report a bursary he received from his university, Mound. All financial aid is now considered taxable income. He paid taxes on the bursary and was assessed a penalty. If he can be penalized, surely the Mulroneys of the world should be penalized.