We are often more outraged by small scandals than by big ones. The average person knows, for instance, that $16 is a bit rich for a glass of orange juice. A lot of us have to think a bit to remember how many zeroes there are in a billion.
But there is in Canada a multi-billion-dollar rip-off taking place that should concern us all, because it’s coming out of our pockets.
The Star’s Marco Chown Oved, who along with colleague Rob Cribb, has done stellar work over the last two years tracking down the tax havens of the wealthy, reported this week that Canadians with hidden offshore accounts are evading up to $3 billion in tax a year.
You could make a good start on a national child-care program with that kind of money.
In its first estimate of the international tax gap, the Canada Revenue Agency said that Canadian individuals are hiding between $75 billion and $240 billion in offshore tax havens and elsewhere and not paying tax on it.
Canada’s tax system provides the revenue base to deliver many vital programs and benefits to citizens.
When the rich run out on their fair share of the bill, the burden falls to the rest of us to pay up.
Government could raise taxes. Or cut programs and services. Or run deficits that add debt for future generations to deal with.
The choices are as unappetizing as the perps and the victims of this kind of cheating are clear.
All Canadians should feel the same exasperation and sense of betrayal as that expressed by McGill tax professor Allison Christians.
“It’s disheartening to know that the scale of hiding assets offshore is so large,” she told the Star. “You want to believe people understand the importance of paying taxes. To find out that those with the greatest ability to pay are concealing such large sums offshore is just disappointing.”
It’s almost certain, moreover, that the CRA estimate understates the problem.
The Conference Board of Canada estimated in a 2017 report that the federal government is missing out on uncollected taxes of about $16 billion a year — and possibly as much as $47.8 billion.
Even that understates the problem because it doesn’t include taxes owed to provincial and municipal governments.
Ideally, everyone should pay their fair share. Identifying a problem is the first step in addressing it. This initial report by the CRA is both overdue and welcome.
It’s a crying shame that during his campaign for the American presidency in 2016, Donald Trump made a virtue of tax-dodging, bragging that he was smart to pay little or none.
For too long, the wealthy have treated tax evasion as a test of their smarts (or those of the lawyers and accountants who enable them), portraying themselves as exemplars of law and order even as they shamelessly flout it.
Tax evasion is not a victimless crime. The victims are all of us.
Lost revenue to which the government is entitled pays for an already over-burdened health care system, infrastructure more than overdue for replacement or repair, the aircraft, vessels and equipment provided to Canadian troops, and much more.
Thanks to the Panama Papers and Paradise Papers leaked in recent years, and to a consortium of journalists such as Chown Oved and Cribb around the world, citizens in Canada and other countries know a lot more about how they’ve been shafted by those who refuse to share the burden of living in a decent society.
Increased enforcement at the CRA has located undeclared offshore assets and resulted in audits that have recovered unpaid tax money. But that is made difficult by a globalized world and complex cross-border transactions. The work is only beginning.
There are vast social and political implications in the growing gulf between the very wealthy and the majority.
For the government in Ottawa, there is mounting evidence of the extent of an unconscionable problem and increasing urgency to address it.
https://www.thestar.com/opinion/editorials/2018/06/28/ottawa-must-close-tax-gap-and-stop-multi-billion-dollar-rip-off.html
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