FacebookTwitterRedditEmail

Give Us Our Money Back!

There is a class of people and corporations in this country whose illicit financial practices have an enormous negative impact on the country and its citizens. Yet the law and order regime of Stephen Harper barely plays lip service to the issue of tax evasion through tax havens. While Harper cuts billions from government programs in the name of deficit reduction, he refuses to go after billions of dollars in revenue lost to tax evasion and avoidance every year. The practice has been going on for at least 40 years and has grown to breathtaking levels worldwide.

Globally it is estimated that between $21 trillion and $32 trillion is hidden away in these secrecy jurisdictions. Total global financial wealth is estimated at between $200 and $210 trillion, so the hidden wealth is a significant proportion of the total. Apply even a small percentage tax to this amount (greater than the U.S. GDP and at least 12 times that of Canada’s) and you get an idea of how much revenue is lost to governments around the world.

James Henry, an authority on the issue with the U.S.-based Tax Justice Network, says the U.S. has determined that minimally, that country loses $100 billion a year through tax evasion. A rough extrapolation for Canada suggests that we lose at least $10 billion yearly to this practice. The Tax Justice Network estimates that $280 billion in revenue is lost globally.

For the first time ever industrialized countries like the U.S. and Germany are beginning to take the issue seriously as they face accumulated deficits that look nearly impossible to pay off — and citizens who are increasingly unwilling to pay the price for the other financial crimes that nearly brought down the global economy. Suddenly, turning a blind eye to the greed of their economic elites means threatening their own political futures. The game has changed.

Never enough for the greedy

Not satisfied with the largesse gained through the sweeping tax cuts and deregulation of the last 15 years, the world’s largest corporations and wealthiest individuals use these jurisdictions (there are more than 70 countries offering these services) to park their money where there is minimal regulation, little or no taxation on the non-resident wealth, and guaranteed secrecy which is actually enshrined in the countries’ laws. There is no easy way of knowing of which corporations have accounts and no systematic effort to share information with other countries.

Many of the world’s largest banks — such as City Bank, UBS and J.P. Morgan, as well as most of the big Canadian banks — have divisions whose exclusive function is to facilitate this grand theft. If the word conspiracy doesn’t come to mind, it should. The fact that they have remained protected for so long demonstrates just how beholden our political class is to their economic elite, the one per cent. Or should we say the .14 per cent — the actual proportion of global citizens who claim all those trillions.

Toby Sanger, senior economist with CUPE, crunched the Statistics Canadanumbers and found that more and more Canadian investment is going offshore to avoid taxes: it was 10 per cent in 1987 and 24 per cent in 2011. According to Sanger’s analysis, Barbados alone has seen its secret Canadian accounts grow 60 per cent in the four years up to 2011 — from $33.4 billion in 2007 to $53.3 billion. The Cayman Islands squirrels away $25.8 billion, Ireland over $23 billion and Bermuda and Luxembourg (up 318 per cent), $13 billion each.

Canadian banks have a huge presence in the Caribbean, the home of many of the most notorious tax havens. While they claim their hands are clean when it comes to helping people hide their money, a Université du Québec à Montréal study estimated that between 1991 and 2003 the Big Five Canadian banks managed to avoid $16 billion in provincial and federal taxes through the use of offshore subsidiaries.

It should be noted that as outrageous as this situation is for Canada’s government revenue, tax havens are especially devastating for developing countries. Washington-based Global Financial Integrity (GFI) calculated that 17 times as much money leaks out of Africa to tax havens than comes in as development aid. Between 1970 and 2008 Africa received $50 billion in aid but lost at least $854 billion in illicit capital outflows. The numbers suggest that if these secrecy jurisdictions were shut down, there would be no need for aid.

Our wealthy citizens — corporate and otherwise — using these secret accounts are in fine company. The UN Office of Drugs and Crime says more than US$1.5 trillion of criminal money is laundered yearly through these same tax havens.

Robbing Us Blind

Let’s call a spade a spade: the systematic use of tax havens is nothing less than grand theft. It is, moreover, theft from the community and from the millions of citizens who suffer two abuses — the erosion of services caused by the bleeding of revenue and the added burden of having to make up the lost revenue for those services that remain. Living in Canada is not a right, it is a privilege, and part of that privilege, for better or worse, is the opportunity to become fabulously wealthy while at the same time enjoying the benefits of one of the most civilized countries in the world. That our most wealthy citizens not only see it as their right to get rich but their right as well to rip off the country that privileges them is reprehensible.

And what do these tax evaders steal? They steal affordable education from students, home-care workers from the elderly, conservation officers from our pristine environment, affordable housing from the homeless and child care from the children of low income families. They deliberately and with stunning arrogance diminish the country they claim to call their own.

While the Conservative government says it is serious about recovering the lost billions, it is doing very little in practice. (Remember, Harper once stated, “Actually, there is no tax I like.”) Of the 106 Canadians named by a whistleblower in Lichenstein with assets totaling over $100 million, only $5.4 million in taxes has been recovered (the U.S. has recovered $50 billion through its efforts) and no Canadian has been charged or convicted. There is no word on what is happening to the 1,750 Canadians unmasked by a joint CBC News and Globe and Mail investigation of Swiss-based HSBC in 2010.

If the Harper government is serious about the issue we will know by its actions, not its lip service. We will know when the government forces corporations to publish what they pay in taxes on a country by country basis when it actively pushes for strong action at the G20, and when it promotes the automatic exchange of tax information with other countries.

But the best indication that it is serious will be when it increases funding to the tax audit program of the Canada Revenue Agency (CRA) instead of cutting its budget as it did in July — cuts that will actually reduce the amount of investigation and enforcement at a time that tax evasion is increasing. The Harper government knows what the results of increasing the number of auditors would be. In 2005 the federal government increased the capacity of the CRA to combat aggressive international tax planning by $30 million and raised an additional $2.5 billion in revenue. For a regime that talks about running government like a business, 8,300 per cent is a pretty good return on investment.

What is it waiting for?

MURRAY DOBBIN, now living in Powell River, BC has been a journalist, broadcaster, author and social activist for over forty years.  He now writes a bi-weekly column for the on-line journals the Tyee and rabble.ca. He can be reached at murraydobbin@shaw.ca

 

More articles by:

MURRAY DOBBIN, now living in Powell River, BC has been a journalist, broadcaster, author and social activist for over forty years.  He can be reached at murraydobbin@shaw.ca

July 08, 2020
Laura Carlsen
Lopez Obrador’s Visit to Trump is a Betrayal of the U.S. and Mexican People
Melvin Goodman
Afghanistan: What is to be Done?
Thomas Klikauer – Norman Simms
The End of the American Newspaper
Sonali Kolhatkar
The Merits of Medicare for All Have Been Proven by This Pandemic
David Rosen
It’s Now Ghislaine Maxwell’s Turn
Nicolas J S Davies
Key U.S. Ally Indicted for Organ Trade Murder Scheme
Bob Lord
Welcome to Hectobillionaire Land
Laura Flanders
The Great American Lie
John Kendall Hawkins
Van Gogh’s Literary Influences
Marc Norton
Reopening vs. Lockdown is a False Dichotomy
Joel Schlosberg
“All the Credit He Gave Us:” Time to Drop Hamilton’s Economics
CounterPunch News Service
Tribes Defeat Trump Administration and NRA in 9th Circuit on Sacred Grizzly Bear Appeal
John Feffer
The US is Now the Global Public Health Emergency
Nick Licata
Three Books on the 2020 Presidential Election and Their Relevance to the Black Live Matter Protests
Elliot Sperber
The Breonna Taylor Bridge
July 07, 2020
Richard Eskow
The War on Logic: Contradictions and Absurdities in the House’s Military Spending Bill
Daniel Beaumont
Gimme Shelter: the Brief And Strange History of CHOP (AKA CHAZ)
Richard C. Gross
Trump’s War
Patrick Cockburn
Trump’s Racism May be Blatant, But the Culture He Defends Comes Out of the Civil War and Goes Well Beyond Racial Division
Andrew Stewart
Can We Compare the George Floyd Protests to the Vietnam War Protests? Maybe, But the Analogy is Imperfect
Walden Bello
The Racist Underpinnings of the American Way of War
Nyla Ali Khan
Fallacious Arguments Employed to Justify the Revocation of Jammu and Kashmir’s Autonomy and Its Bifurcation
Don Fitz
A Statue of Hatuey
Dean Baker
Unemployment Benefits Should Depend on the Pandemic
Ramzy Baroud – Romana Rubeo
Will the ICC Investigation Bring Justice for Palestine?
Sam Pizzigati
Social Distancing for Mega-Million Fun and Profit
Dave Lindorff
Private: Why the High Dudgeon over Alleged Russian Bounties for Taliban Slaying of US Troops
George Wuerthner
Of Fire and Fish
Binoy Kampmark
Killing Koalas: the Promise of Extinction Down Under
Parth M.N.
Back to School in Rural India: Digital Divide to Digital Partition
Ed Sanders
The Burning of Newgate Prison: a Glyph
July 06, 2020
Melvin Goodman
Foreign Election Interference: Who is to Blame?
JoAnn Wypijewski
On Disposability and Rebellion: Insights From a Rank-and-File Insurgency
Marshall Auerback – Jan Frel
There’s a Hidden Economic Trendline That is Shattering the Global Trade System
Evaggelos Vallianatos
A Just and Talented Government for Our Hazardous Age
Manuel García, Jr.
Biosphere Warming in Numbers
Ron Jacobs
Kidnapping Kids: As American as the Fourth of July
Tasha Jones
Pyramids. Plantations. Projects. Penitentiaries
Binoy Kampmark
Criminalising Journalism: Australia’s National Security Craze
Eve Ottenberg
Re-Organizing Labor
Mike Garrity
How We Stopped Trump From Trashing a Critical Montana Roadless Area in Grizzly Habitat
Nino Pagliccia
The Meaning of the 1811 Independence for Today’s Venezuela
Michael Galant
We Need a Global Green New Deal
Jill Richardson
Learning Not to Look Away
Marshall Sahlins
Donald Trump at 130,000 and Rising
FacebookTwitterRedditEmail