Tuesday, June 18, 2019

They're Still With Us


It's one thing to have a low corporate tax structure. It's something else again when corporations simply don't pay taxes. The Toronto Star reports that:

Canadian corporations failed to pay between $9.4 billion and $11.4 billion in taxes in 2014, according to the first comprehensive analysis of the country’s corporate “tax gap” — the difference between taxes legally owed and those collected — being released today by the Canada Revenue Agency.
That means 24 to 29 per cent of all the corporate income tax legally due in Canada didn't get paid that year.
The country’s tax hit was reduced significantly by CRA audits that found $6.1 billion of the unpaid bills — reducing the tax gap by 55 to 65 per cent — the report says.

Politicians on the right will continue to howl that we can't afford new government programs -- like pharmacare -- and we can't afford the programs we have. But, clearly, the government is not getting all the revenue it is owed. And corporations have teams of accountants and lawyers to make sure they keep their money:

In two cases last year involving large corporations BMO and Cameco, the CRA said their offshore tax structures were not legitimate and deprived Canada’s tax coffers of more than $3 billion. The companies appealed and a tax judge ruled them onside.
Much of the “aggressive tax planning” corporations use to lower their tax bills involves complex offshore structures that exist in a legal grey area. While the corporate accountants may believe they’re above-board, the CRA doesn’t always agree.

Fifty years ago, David Lewis made an issue of "Corporate Welfare Bums." He was speaking of subsidies to corporations. But, given their record on paying taxes, it would appear that the bums are still with us.

Image: The Toronto Star


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