The existence of off-shore tax havens is not new, yet the Paradise Papers do show just how powerful corporate elites and oligarchs have become in just 40 years.
Their collective wealth in tax free havens was reported at $10 trillion which equals the combined economies of France, Britain and Japan.
The paradise tax avoiders and those hoping to join the paradise tax avoiders were indignant in their response to this release.
They bashed the “false media” and in essence their arguments boiled down to, “we haven’t done anything wrong”, “people are just jealous because we are rich and successful”, “we create jobs and economic growth for the world”.
The problem with these pious justifications is their questionable morality. The corporate elite use tax-funded services, benefits, infrastructure and corporate handouts to earn money, but don’t follow the same rules as ordinary people like you and me.
Armed with my Business degree from the University of Alberta, I was an ardent defender of no corporate taxes. I argued that as job creators, taxing both corporations and employee income would be double taxation.
Then I worked for the corporate elite and saw the whole picture.
Creating jobs was not done in isolation, but in fact is more often a joint effort of government and corporations. The majority of jobs are created with the help of tax writeoffs, favourable policies and regulations, interest-free loans, start-up loans at low rates, forgiveness of municipal taxes or straight cash handouts.
It’s not that I am opposed to public dollars contributing to private job-creating projects because it works. I do, however, think it’s far from fair that employees pay taxes to support corporate largess while corporations contribute less and less to the public good through ever lower corporate tax rates and tax avoidance schemes.
It always irked me when Finance Minister, Paul Martin, was putting Canada’s finances back in the black by reducing public services for ordinary Canadians yet his shipping company had its fleet registered in tax-free jurisdictions.
His argument, and correctly so, was to stay competitive internationally he had to do what all shipping companies were doing. But it still screwed Canadian taxpayers, as do all tax havens.
The purpose of the Income Tax Act is simple. We pay a certain amount of our Canadian generated-income to the government for the common good and to provide those services that would be prohibitive if not paid for collectively.
Economist, Angus Deaton has empirically proven the richer we are the more covetous we become. We really don’t need an economist to tell us this truth, we ourselves fight daily the dissatisfaction of wanting more even though we have so much.
World leaders meet all the time and western countries are always throwing sanctions on one country or another.
Think about the money they would secure for their nations if the G7 countries and the European Common Market put economic sanctions on all tax-free havens.
Granted it would be a little tricky with Switzerland, but isn’t it time these tax-free havens and the wealthy tax avoiders be held to the same standards as the majority of world citizens.
by B.P. Schimke