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What The Panama Papers Have Shown The World

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PANAMA PAPERS
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As the deadline looms for honest tax-paying Canadians to file their income tax, word comes this week that the wealthiest among us are going to extreme lengths to avoid paying their fair share.
The Panama Papers, at 2.6 terabytes of data believed to be the largest-ever leak of documents, reveal the secret dealings of the world's rich and famous who avoid paying taxes. The scheme is to funnel cash through shell companies offering tax havens around the world.

It turns out, tax havens specialize. The Cayman Islands can provide secret bank accounts. The Cook Islands are a good place for private trusts. Luxembourg attracts opaque "foundations," while the British Virgin Islands are a cheap and easy place to set up anonymous offshore companies.

The papers come from a Panamanian law firm, Mossack Fonseca, which specializes in finding the best tax havens around the world, where corporations and the wealthy can hide away their millions to avoid paying taxes at home. It'll even provide fake shareholders and directors for shell companies where needed.

Rather than pay their fair share in taxes at home, where they continue to enjoy all the things that those taxes pay for, the rich would rather pay a law firm in Panama, and its fake corporate officers, thousands of dollars in fees.

The revelations have been front page news around the world, including in Canada where reporters at the Toronto Star - Unifor members - are part of an international consortium of investigative reporters plowing through the documents and making the rich just a little more uncomfortable.

It is great journalism, and just the kind of reporting that is needed to show that there is one rule for the rich and one for the rest of us.

It is important to remember, as you calculate your allowable deductions for dependents or charitable donations, that much of what the Panama Papers expose is perfectly legal, if morally objectionable. Unfortunately, these people aren't necessarily breaking the rules. This is how our unfair system was set up.

The principle behind taxes is simple. You earn money here, you pay taxes here. Those taxes then go to pay for all the things that make this a great country to live: healthcare, roads, education, defense, programs that give our most unfortunate a hand up and others that pursue and prosecute those who break society's rules.

Without taxes, we can't have a society with thriving public services and social safety nets. At least, not one any of us truly wants. Even Adam Smith, the father of modern economics, said that not only must the rich pay their taxes, but they should pay proportionally more if we are to have the government and services we need.

But when the rich and the corporations don't pay their fair share, and set up elaborate schemes to avoid paying even the absurdly low tax rates they lobbied the governments at home to get, all that is put at greater risk.

Legalities and complicated corporate structures aside, this is a story of greed that has resonated with ordinary people around the world. That's because we can instantly see the unfairness of the rich dodging taxes while they dutifully, if at times grumpily, pay theirs.

The 99 per cent of us can see that every time taxes are dodged like this, it means cuts to the hospitals we rely on, to the schools our children go to, to the roads we drive to work on, to the social programs we hope to never need but are glad are there, and more. And, when others don't pay their taxes, the rest of us must pay more.

In Iceland, thousands of his citizens protested when it was revealed that their prime minister was mentioned in the Panama Papers, and he was forced to resign.

In Canada, Finance Minister Bill Morneau says he will look into closing the loopholes that make such schemes possible. This is welcome news, but he will face intense lobbying from corporations and the rich to make only cosmetic changes at most.

It will be up to the rest of us, those paying their taxes in the coming weeks and who see the inherent unfairness of what the Panama Papers reveal, to ensure meaningful change is made.

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