Thursday, 7 July 2011

Tax - who pays and who doesn't

The story that inspired this post comes from the Guardian - about a campaigner in Britain concerned about tax avoidance, and tax havens.

The following quote that caught my eye

...when this government came into power almost the first thing it did was raise VAT rates so that ordinary people would pay more tax and then cut corporate tax rates.

"What's happening here is that the tax burden is being shifted from capital on to ordinary people."


VAT stands for Value Added Tax which is the UK equivalent of our HST.

Large corporations - and the people who run them - pay very little tax. Indeed the amount they "earn" has been steadily increasing at the same time as the amount they pay in tax has been declining. That is true in general - not just in the UK but nearly everywhere. This is the Bilderberg/Hayek/Ronald Regan effect. It has been adopted enthusiastically by governments all over the world: the places that don't do it are regarded as quaint eccentrics at best. But it was not enough to have the tax regime shifted from progressive (the rich pay more, the poor less) to regressive (the poor pay a lot, the rich pay very little) but the wealthy corporations and the rich have also taken advantage of the growing number of tax havens around the world, and the ease with which money can be moved between them. If the amounts are big enough.

So even though I have found an article about Britain and how little they are doing to fight tax avoidance, I will bet that exactly the same thing is happening here in Canada. CRA will be breathing down your neck if you are on a low income but have little resource to chase after the truly enormous amounts of money that are being shunted off shore to avoid paying tax.

I still don;t know how I am going to vote on the HST, simply because whichever way the decision goes it will cost us, the ordinary tax payers, plenty. But you can be sure that the sort of people who can afford to hire tax specialists will be laughing all the way to their money's hiding places.

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