On death and taxes

The Compass - - NEWS - Russell Wanger­sky Russell Wanger­sky is TC Me­dia’s At­lantic re­gional colum­nist. He can be reached at russell.wanger­sky@tc.tc Twit­ter: @Wanger­sky.

“In this world, noth­ing can be said to be cer­tain, ex­cept death and taxes,” Ben­jamin Franklin said in a let­ter to Jean-Bap­tiste Leroy in 1789.

But it ap­pears even more so af­ter the lat­est rev­e­la­tions in what are be­ing called the Panama papers, that only half of the old say­ing is true. You may not be able to cheat death, but there seem to be plenty of peo­ple in the world, rich Cana­di­ans among them, more than able to cheat the tax­man.

This week’s rev­e­la­tions are in a se­ries of ar­ti­cles about the tax­dodg­ing machi­na­tions of a Pana­ma­nian law firm that spe­cial­ized in build­ing shell com­pa­nies to help the rich hide as­sets. The ar­ti­cles are based on a cache of 11.5 mil­lion doc­u­ments from the firm.

It seems to drive the point home more com­pletely: if you’re not well off, you have lit­tle choice but to pay the taxes you owe. If you don’t, tax au­thor­i­ties will track you for as long as it takes to col­lect their due. If you’re rich, though — at least if you’re rich enough to pay peo­ple to help you move as­sets around — it’s a dif­fer­ent story.

Woe be­tide the av­er­age per­son who owes money.

Years ago, a com­pany I worked for failed to re­mit school taxes to the pro­vin­cial gov­ern­ment on my be­half. Even though my name ap­peared in the lo­cal news­pa­per sev­eral times a week, tax au­thor­i­ties sat­is­fied them­selves that one reg­is­tered let­ter to the ad­dress I’d lived at, and moved from in 1986, would suf­fice for no­ti­fi­ca­tion. Never mind that my name was in the phone book. Never mind that Wanger­sky is not a name that’s in any way com­mon in New­found­land. Even­tu­ally, af­ter pur­su­ing me for more than a decade, they found me — and when they did, they were threat­en­ing in­deed.

I paid the amount that my em­ployer was sup­posed to re­mit to the gov­ern­ment, but, un­be­knownst to me, did not. I wasn’t pleased about that $318, but there wasn’t much I could do.

The reach of tax au­thor­i­ties is quite un­par­al­leled. In a re­cent case in Toronto, a tax au­di­tor, un­sat­is­fied with a cou­ple’s ac­count­ing, sim­ply seized bank records show­ing ev­ery de­posit and with­drawal the two had made for a pe­riod of years.

Yet Toronto Star re­ports — based on the Panama papers — sug­gest tax losses due to off­shore tax havens like the Panama ones are cost­ing Cana­dian tax­pay­ers be­tween $6 bil­lion and $7.8 bil­lion a year.

I would like to think that, when it comes to tax­a­tion, we’re all in the same boat. That we’d get the same even-handed, non-pref­er­en­tial treat­ment, re­gard­less of the size of bank bal­ance we com­mand. That the same kind of rigour would be ap­plied to track­ing down the taxes owed by the rich­est of Cana­di­ans as well.

Clearly, it’s not. Not long ago, I wrote about the spe­cial deals be­ing of­fered to mil­lion­aire Cana­di­ans who had taken part in one par­tic­u­lar over­seas tax dodge: agree to just pay the tax ow­ing and stay silent, and there would be lit­tle in­ter­est and no penal­ties. In short, just pay what you’d pay as if you had been pay­ing taxes all along. No harm, no foul. (In­ter­est­ing to point out? Tax pre­par­ers who help a tax­payer avoid taxes ow­ing are also li­able for large penal­ties. Haven’t heard any­thing about that part of the equa­tion just yet. Chances are, they were of­fered a spe­cial deal, too.)

Maybe Franklin should have said it dif­fer­ently: noth­ing can be said to be cer­tain, ex­cept death and fi­nan­cial priv­i­lege.

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