Where's the f'ing money, Lebowski?
As mentioned in a previous blog post, the global hunt is on to stop global tax havens from allowing rich people to hide trillions from the taxman.
Both the US and several leaders in Europe have gone on the attack against tax havens in the post-crash world. After having bailed out corporations across the globe, the hunt is on to get back taxes that the rich are hiding.
Revelations by UK uncut that companies like Apple, Google, Starbucks and Cadbury were earning hundreds of millions and billions in profit while paying peanuts in taxes, have drawn sharp criticism of tax avoidance in the UK, who are trying to save face by at least pretending to go after tax avoiders.
Perennial tax champions in Scandianvia are cracking down too. Swedish EQT, Scandinavia’s largest private equity group, re-organised operations over concerns about their use of tax havens.
In Italy, the tax man has gone hard after the likes of fashion designers Dolce & Gabbana for hiding hundreds of millions. Tax police have seized assets of companies like Bulgari and Marzotto, claiming tax avoidance.
Many developing countries are also trying to clamp down on money leaving their coffers. Kofi Annan, former secretary-general of the UN, has complained, " It is all but impossible for Africa’s understaffed and poorly resourced revenue authorities to track real profits through the maze of shell companies, holding companies and offshore entities used by investors.”
Even Spain has gone after football legend Lionel Messi claiming $4 million in unpaid taxes.
While tax avoidance has continued pressure on tax havens and tax avoidance by the rich, everything hit the fan earlier this year when one of the largest leaks in world history of tax haven account information going back 30 years was given to the International Consortium of Investigative Journalists (ICIJ) in Washington.
The effects were harsh and immediate all over the globe - from Mongolia to France to Canada.
France's newest socialist government has gone on the offensive to try to eradicate tax haven's en masse after it was revealed that the minister responsible for tax crack down had a tax avoidance account for years.
Germany had similar concerns and promised to crack down as well along with the UK and many other governments in Europe.
One of the biggest fronts on the attack has come from the US Foreign Account Tax Compliance Act (FATCA) which was passed in 2010. Passed after UBS Investment Bank was found to have helped many, many wealthy Americans avoid paying their taxes, the law has allowed the US to force countries and banks around the globe to give them tax information. The EU is trying to develop their own version of FATCA.
Yup, everything was set to come to a head at this weeks G8 meeting in London. With Europe and the US poised to clamp down hard on ax avoidance a plan was coming into fruition to provide automatic exchange of tax information along with ownership register for shell companies.
Until Canada scuttled the whole damn thing.
While most media outlets trumpeted a stunning G8 deal on taxes here's what legitimate folks had to say about it:
“After much hype, the G8’s proposal around tax have been an anti climax...broad declarations and no tangible action" - Taxand
The G8 “largely failed” to seize the opportunity to pursue tax and transparency policies to root out systematic corruption and enhance the democratic process - Financial Transparency Coalition
Yup, and most of this is the fault of Canada's sterling leadership to protect tax cheats. According to the Financial Times: "Stephen Harper, Canada’s prime minister, is resisting – partly on the grounds of tax confidentiality – plans to crack down on aggressive tax avoidance and evasion by requiring the disclosure of the ultimate owner of shell companies."
Yup, it's been a banner year for Steve-o and his friends who are trying to avoid paying their taxes.
Last week, a CBC analysis of the government found that the government has been super lax on going after tax cheats. Tax expert David Chodikoff noted few prosecutions from the latest ICIJ leak and two other big data leaks in 2007 and 2009, when nearly 1,900 Canadian names were given to the Canada Revenue Agency.
A few months earlier, P.E.I. Senator Percy Downe accused Revenue minister Gail Shea of stonewalling perennial budget-thorn, parliamentary budget officer Kevin Page. Apparently Shea, at the centre of almost every scandal on Canadian tax avoidance, was refusing to turn over information on how much money Canada loses in overseas tax evasion. She was also refusing to shell out money to for leaks on tax cheaters - something that the US and Germany do frequently.
Of course the biggest banana comes from the major Conservative cuts to the CRA compliance section. While the governments latest budget figures indicate increased revenue from getting tax cheats to pay their taxes, the Conservatives have actually cut CRA money to go after tax cheats.
As Utah Philips once said "“The earth is not dying, it is being killed, and those who are killing it have names and addresses.”
The same can be said for tax cheats.
Thankfully, you can search a bunch of the addresses by typing the name of your city or province here:
http://offshoreleaks.icij.org/search
The Liebowski blog tracks big piles of money. It appears regularily on the Toronto Media Co-op.
