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Lots of news about money

Lots of news about money

November 16, 2017

money newsIt seems a lot of news lately has to do with the almighty dollar.

During the summer, Federal Finance Minister Bill Morneau introduced a number of proposed tax changes that affected small business owners. There was a ground swell of opposition and suddenly a relatively young Liberal government was in damage control.

Philosophically, we all agree that everybody needs to pay their fair share of taxes in order to provide the benefits we all take for granted. There is often disagreement, however, on what is fair.

One good thing that came out of the controversy over proposed tax changes was that many Canadians voiced concern that it’s time for a major overhaul of how we collect government revenue. The message was that just tweaking the system wouldn’t be enough.

Then came the embarrassing news that the Finance Minister did not sell his business assets or put them in a blind trust when he joined the federal cabinet. Canadians are very sensitive about how politicians can influence policy for their own personal financial advantage.

As a nation, we do not mind that some have accumulated financial wealth because of hard work or good fortune. As long as everybody plays by the rules.

When it comes to money, Canadians also have a strong interest in how the rich and famous manage their assets.

Due to the Paradise Papers, we are now privy to how some affluent Canadians manage their assets.

The Paradise Papers are a collection of 13.4 million confidential files that became public last week because the computers of a law firm in Bermuda were hacked.tex havens

The files show the hidden offshore financial dealings of wealthy individuals and multinational corporations.

This is a big deal.

There were 3,000 Canadians identified in the Paradise Papers as being involved in offshore accounts. Steven Bronfman, a significant Liberal Party fundraiser, was reported to be among them.

The initial over-reaction by many was Bronfman had done something illegal. That is not necessarily the case because offshore trusts are legal.

The Conservative opposition pounced on the opportunity to embarrass the government. One conservative member of Parliament asked the Prime Minister to return all funds raised for the Liberal Party by Bronfman if there was any evidence of wrongdoing.

Such an extreme initial reaction makes no sense. What does make sense is that the Canada Revenue Agency, which oversees the collection of taxes, now has information on 3,000 Canadians.

In his research on tax havens, Gabriel Zucman, an assistant professor of economics at University of California, Berkley, has estimated the annual global tax loss at $190 billion, and that the tax avoidance of the multinational corporations could be close to $7.6 trillion.

Money plays an important role in society. For some it is how they measure their success in both the ability to earn money and to accumulate wealth.

Tax avoidance by some has consequences for all. Our taxes pay for education, health care, infrastructure, and transportation systems, which attracts investments and business. All of this allows Canada to succeed in a competitive global market.

Many recent news stories have been about money. Canadians accept that everyone has varying amounts of money. But it isn’t all about wealth. We also want fairness, and a certain level of transparency is needed to ensure fairness prevails.