On death and taxes
“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 tax-dodging 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.