The Panama Papers are in the news today but the underlying stories are not new. American commentator Matthew Yglesias reports on the latest developments. He says the leaked papers:
…offer the most granular look ever at a banal reality that’s long been hiding in plain sight. Even as the world’s wealthiest and most powerful nations have engaged in increasingly complex and intensive efforts at international cooperation to smooth the wheels of global commerce, they have willfully chosen to allow the wealthiest members of Western society to shield their financial assets from taxation (and in many cases divorce or bankruptcy settlement) by taking advantage of shell companies and tax havens.
If Panama or the Cayman Islands were acting to undermine the integrity of the global pharmaceutical patent system, the United States would stop them. But the political elite of powerful Western nations have not acted to stop relatively puny Caribbean nations from undermining the integrity of the global tax system — largely because Western economic elites don’t want them to.
The first thing that really has to be done is for people to start to see how big and bad this system has become. …As a first step for reform, we need to understand that and spread the message.
…Somebody else has to pay for those taxes that aren’t being paid… You get a compression of the tax system because of this dynamic. Ordinary people have to pay more in order to pay the taxes that wealthier people are not paying.
How much extra is being paid by British Columbians because of tax evasion and avoidance? If the cost to the USA is more than $100 billion, the cost to Canada is likely $10 billion to $15 billion C$ a year. BC’s share extrapolates to more than a billion dollars a year.
Proving Yglesias’ assertion that economic elites don’t want an end to tax abuses is a Globe and Mail report from 2014, which followed work by Elizabeth Thompson at iPolitics:
“Internal Canada Revenue Agency documents confirm the agency is cutting some of its most highly-trained staff and folding international tax evasion units…
If we calculate the value of subsidies and tax expenditures (think BC Hydro, IPPs and gas production) the financial imposition on ordinary BC residents measures in the billions.
I’ve written about this subject previously. Click on the category “Tax Evasion & Avoidance” shown on the left to scroll through related articles. I also suggest you view YouTube videos that autoplay if you run the Democracy Now video shown above.
Categories: Tax Evasion & Avoidance