By Al Lehmann
Taxation has always been a vexatious issue. During the time of Louis XIV, his finance minister, Jean Baptist Colbert, characterized it as getting “the greatest number of feathers from the goose, with the least amount of hissing.” Building Versailles evidently took a large number of “feathers.”
In the Judea of the Roman Empire, a lucrative tax farm run by Pontius Pilate, Jesus advised some spies who were questioning him about paying tax to the Romans to “render unto Caesar the things that are Caesar’s.” Some historians think Jesus’s reply was to keep himself out of trouble with the Roman authorities.
It has also been interpreted simply as advice, in contemporary argot, to suck it up and pay what you owe (with overtones suggesting that the things of this world are not important anyway, compared to religious preoccupations).
We hear a lot about taxes in the contemporary world, especially now that tax time is coming up once more. Most Canadian employees have income taxes deducted from their paycheques, a “never came, easily gone” process that makes tax time pretty simple. Unlike other workers, self-employed professionals, business owners, investors and their ilk are trusted to declare income and capital gains truthfully and to pay their expected share to the government. We wish.
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Tax codes’ myriad exemptions, reimbursements, credits, and so on are today so byzantine that it is extremely difficult to assess what is legal or illegal, fair or biased, a reporting error or a crime. Talk to three tax advisors at the Canada Revenue Agency about a tricky issue and one can easily get three different answers.
Tax evasion, which is apparently common, is serious business. American gangster Al Capone avoided conviction on many crimes including murder until he was put away for not paying his taxes.
The Panama Papers recently revealed that over 900 wealthy Canadians have been stashing away untaxed income for years. Only 12 have been prosecuted, government inaction termed “shocking” and “pathetic” by opposition critics. More than 90 per cent of Canada’s largest 60 corporations have subsidiaries in tax havens.
These tax evaders aren’t people like the cashier at 7-11 or your local cab driver. They’re multi-millionaires and billion-dollar companies. Every dollar in unpaid tax that they’re keeping offshore has to be paid by the rest of us, a burden most of us don’t wish to assume. Either that, or Canada’s deficit continues to enlarge, adding to our already large public debt, a “horror” that the fiscally conservative usually loudly decry.
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Organizations like the Fraser Institute used to routinely publicize so-called “Tax Freedom Day” (last year June 14), the day after which our incomes can switch from paying all our visible and unseen taxes and go toward our own personal spending. But according to Canadians for Tax Fairness (see www.taxfairness.ca), Corporate Tax Freedom Day comes as early as January 7, the time by which “Canadian corporations could have paid all their federal and provincial corporate income taxes out of their revenues for the year.”
Corporations promote ever-lower rates (down from over 40 peer cent in 1960 to 15 per cent today) in order to remain “competitive” and to “increase investment, stronger growth and jobs.” Instead, what we’ve gotten for all this foregone revenue is low economic growth, increased economic inequality, and endemic middle-class income insecurity. Good deal? You do the math. Is that some hissing that I hear?