Canada's offshore tax dodge Diane Francis, Financial Post Published: Saturday, May 03, 2008
For nearly 40 years, Canada's richest individuals have been able to get off scot-free from paying income taxes. So have their children.
The fix is not difficult and some areas where reforms can be imposed are outlined below. Even so, Canada's politicians and policy wonks do nothing.
Since 1972, a series of court decisions have attacked rules, eroding them to the point where rich people can move offshore for a couple of years, move back again to use our health care and other services, and still never pay taxes. Simple legislation would change this immediately by adopting U.S.-style rules.
But dodging taxes is easy: The taxpayer pays a one-time 25% hit on his wealth by declaring he is moving to a tax-free jurisdiction; he puts the direct management of his money in the hands of financial intermediaries or trustees. Canada Revenue Agency regards this as arm's-length offshore trusts and, therefore, untaxable when distributed, even back to Canada.
"It's easy to get out of taxes," said offshore expert and consultant Alex Doulis. "A wealthy Canadian will leave and become a non-resident for tax purposes, pay a 25% departure tax [on all his or her wealth except for the value of his principal residence or Canadian-based corporations] and never pay taxes again. They also have someone set up a trust offshore and put capital into it so their children or grandchildren can be sent distributions from the non-resident trust to Canada tax-free in perpetuity."
In other words, Canada's tax loopholes actually encourage departures because wealthy Canadians pay a one-time 25% taxation rate on their RRSP, which, if they did not leave, would net 46% personal income tax rates when withdrawn. The U.S. tax system does not allow such tax dodges.
Even worse, wealthy Canadians can dodge taxes but also still live in Canada up to 181 days a year. In other words, Canada Revenue Agency lets them have their cake and eat it, too: Cold months in the sun, warm months back home and all their money and investment profits tax- free. And their offspring and other beneficiaries never have to move offshore but can live completely tax-free in Canada on offshore trust fund income and be entitled to use Canada's health care, education and other services paid by taxpayers.
Canada also allows people to leave "permanently" for tax purposes, then come back without penalty. That's why it is not unusual for old expatriates, or those with serious illnesses, to return to poach off Canadians for health care because they are medically uninsurable abroad.
"Fortunately, for every one of these guys there are 10 of us who don't do this," said Seymour Schulich. "My family's here, my grandchildren are here and I made my money here. Say what you want, I think you owe allegiance to the place which gave you the opportunities. I would say to these guys who leave, 'It's okay to take your money and run, but don't ever come back.' "
Anyone who leaves Canada as a tax resident should be allowed to rejoin our health-care systems only if they pay a huge re-entry fee, equivalent to the taxes saved while abroad. That's what private clubs do when you take a leave of absence. Canada should do that, too. That's just for starters. Next week I will write about another issue of tax leakage and unfair entitlements that Ottawa ignores or is ignorant of.
--------------------------------------------------------------------------- -------------------------- Miss a Tax Tale Miss a lot! Follow the link to the new Canada Revenue Agency Story Of The Week index! http://groups.google.com/group/can.taxes/browse_thread/thread/0423e5e... --------------------------------------------------------------------------- ---------------------------- Alan Baggett
It is worse than that. They can live in Canada all year around like Paul Martin did. Even be the PM while you do it and get health care. When Paul Martian last adjusted the rules he made sure he didn't cut into his tax loophole. Just setup and offshore corporation, put the money in there. Until it is paid out, no reason to even declare it to the CCRA as no income or gains are realized until it is paid out or dissolved. Wish I had enough cash to justify the expense.
On top of that, the corporation, under guidance of the Canadian resident, can invest in Canada and get the 25% tax rate on dividends that is favourable. Sure beats the pain of personal rates that can be 40% or higher. Plus the business can get investment credits.
Ottawa ignores it as the plutocracy that funds the parties we have contribute generously to keep these holes open.
> How (and Why) the Rich Get Even Richer! :CRA SOTW
> Canada's offshore tax dodge > Diane Francis, Financial Post > Published: Saturday, May 03, 2008
> For nearly 40 years, Canada's richest individuals have been able to > get off scot-free from paying income taxes. So have their children.
> The fix is not difficult and some areas where reforms can be imposed > are outlined below. Even so, Canada's politicians and policy wonks do > nothing.
> Since 1972, a series of court decisions have attacked rules, eroding > them to the point where rich people can move offshore for a couple of > years, move back again to use our health care and other services, and > still never pay taxes. Simple legislation would change this > immediately by adopting U.S.-style rules.
> But dodging taxes is easy: The taxpayer pays a one-time 25% hit on his > wealth by declaring he is moving to a tax-free jurisdiction; he puts > the direct management of his money in the hands of financial > intermediaries or trustees. Canada Revenue Agency regards this as > arm's-length offshore trusts and, therefore, untaxable when > distributed, even back to Canada.
> "It's easy to get out of taxes," said offshore expert and consultant > Alex Doulis. "A wealthy Canadian will leave and become a non-resident > for tax purposes, pay a 25% departure tax [on all his or her wealth > except for the value of his principal residence or Canadian-based > corporations] and never pay taxes again. They also have someone set up > a trust offshore and put capital into it so their children or > grandchildren can be sent distributions from the non-resident trust to > Canada tax-free in perpetuity."
> In other words, Canada's tax loopholes actually encourage departures > because wealthy Canadians pay a one-time 25% taxation rate on their > RRSP, which, if they did not leave, would net 46% personal income tax > rates when withdrawn. The U.S. tax system does not allow such tax > dodges.
> Even worse, wealthy Canadians can dodge taxes but also still live in > Canada up to 181 days a year. In other words, Canada Revenue Agency > lets them have their cake and eat it, too: Cold months in the sun, > warm months back home and all their money and investment profits tax- > free. And their offspring and other beneficiaries never have to move > offshore but can live completely tax-free in Canada on offshore trust > fund income and be entitled to use Canada's health care, education and > other services paid by taxpayers.
> Canada also allows people to leave "permanently" for tax purposes, > then come back without penalty. That's why it is not unusual for old > expatriates, or those with serious illnesses, to return to poach off > Canadians for health care because they are medically uninsurable > abroad.
> "Fortunately, for every one of these guys there are 10 of us who don't > do this," said Seymour Schulich. "My family's here, my grandchildren > are here and I made my money here. Say what you want, I think you owe > allegiance to the place which gave you the opportunities. I would say > to these guys who leave, 'It's okay to take your money and run, but > don't ever come back.' "
> Anyone who leaves Canada as a tax resident should be allowed to rejoin > our health-care systems only if they pay a huge re-entry fee, > equivalent to the taxes saved while abroad. That's what private clubs > do when you take a leave of absence. Canada should do that, too. > That's just for starters. Next week I will write about another issue > of tax leakage and unfair entitlements that Ottawa ignores or is > ignorant of.
> --------------------------------------------------------------------------- -------------------------- > Miss a Tax Tale Miss a lot! > Follow the link to the new Canada Revenue Agency Story Of The Week > index! > http://groups.google.com/group/can.taxes/browse_thread/thread/0423e5e... > --------------------------------------------------------------------------- ---------------------------- > Alan Baggett
> It is worse than that. They can live in Canada all year around like Paul > Martin did. Even be the PM while you do it and get health care. When Paul > Martian last adjusted the rules he made sure he didn't cut into his tax > loophole. Just setup and offshore corporation, put the money in there. > Until it is paid out, no reason to even declare it to the CCRA as no income > or gains are realized until it is paid out or dissolved. Wish I had enough > cash to justify the expense.
> On top of that, the corporation, under guidance of the Canadian resident, > can invest in Canada and get the 25% tax rate on dividends that is > favourable. Sure beats the pain of personal rates that can be 40% or > higher. Plus the business can get investment credits.
> Ottawa ignores it as the plutocracy that funds the parties we have > contribute generously to keep these holes open.
> > How (and Why) the Rich Get Even Richer! :CRA SOTW
> > Canada's offshore tax dodge > > Diane Francis, Financial Post > > Published: Saturday, May 03, 2008
> > For nearly 40 years, Canada's richest individuals have been able to > > get off scot-free from paying income taxes. So have their children.
> > The fix is not difficult and some areas where reforms can be imposed > > are outlined below. Even so, Canada's politicians and policy wonks do > > nothing.
> > Since 1972, a series of court decisions have attacked rules, eroding > > them to the point where rich people can move offshore for a couple of > > years, move back again to use our health care and other services, and > > still never pay taxes. Simple legislation would change this > > immediately by adopting U.S.-style rules.
> > But dodging taxes is easy: The taxpayer pays a one-time 25% hit on his > > wealth by declaring he is moving to a tax-free jurisdiction; he puts > > the direct management of his money in the hands of financial > > intermediaries or trustees. Canada Revenue Agency regards this as > > arm's-length offshore trusts and, therefore, untaxable when > > distributed, even back to Canada.
> > "It's easy to get out of taxes," said offshore expert and consultant > > Alex Doulis. "A wealthy Canadian will leave and become a non-resident > > for tax purposes, pay a 25% departure tax [on all his or her wealth > > except for the value of his principal residence or Canadian-based > > corporations] and never pay taxes again. They also have someone set up > > a trust offshore and put capital into it so their children or > > grandchildren can be sent distributions from the non-resident trust to > > Canada tax-free in perpetuity."
> > In other words, Canada's tax loopholes actually encourage departures > > because wealthy Canadians pay a one-time 25% taxation rate on their > > RRSP, which, if they did not leave, would net 46% personal income tax > > rates when withdrawn. The U.S. tax system does not allow such tax > > dodges.
> > Even worse, wealthy Canadians can dodge taxes but also still live in > > Canada up to 181 days a year. In other words, Canada Revenue Agency > > lets them have their cake and eat it, too: Cold months in the sun, > > warm months back home and all their money and investment profits tax- > > free. And their offspring and other beneficiaries never have to move > > offshore but can live completely tax-free in Canada on offshore trust > > fund income and be entitled to use Canada's health care, education and > > other services paid by taxpayers.
> > Canada also allows people to leave "permanently" for tax purposes, > > then come back without penalty. That's why it is not unusual for old > > expatriates, or those with serious illnesses, to return to poach off > > Canadians for health care because they are medically uninsurable > > abroad.
> > "Fortunately, for every one of these guys there are 10 of us who don't > > do this," said Seymour Schulich. "My family's here, my grandchildren > > are here and I made my money here. Say what you want, I think you owe > > allegiance to the place which gave you the opportunities. I would say > > to these guys who leave, 'It's okay to take your money and run, but > > don't ever come back.' "
> > Anyone who leaves Canada as a tax resident should be allowed to rejoin > > our health-care systems only if they pay a huge re-entry fee, > > equivalent to the taxes saved while abroad. That's what private clubs > > do when you take a leave of absence. Canada should do that, too. > > That's just for starters. Next week I will write about another issue > > of tax leakage and unfair entitlements that Ottawa ignores or is > > ignorant of.
> > --------------------------------------------------------------------------- -------------------------- > > Miss a Tax Tale Miss a lot! > > Follow the link to the new Canada Revenue Agency Story Of The Week > > index! > >http://groups.google.com/group/can.taxes/browse_thread/thread/0423e5e... > > --------------------------------------------------------------------------- ---------------------------- > >Alan Baggett- Hide quoted text -
> - Show quoted text -
Strange isn't it how tax 'loopholes' for the wealthy never seem to close while those for the middle class get shot down almost as soon as they become publicized.
> It is worse than that. They can live in Canada all year around like Paul > Martin did. Even be the PM while you do it and get health care. When Paul > Martian last adjusted the rules he made sure he didn't cut into his tax > loophole. Just setup and offshore corporation, put the money in there. > Until it is paid out, no reason to even declare it to the CCRA as no > income > or gains are realized until it is paid out or dissolved. Wish I had enough > cash to justify the expense.
> On top of that, the corporation, under guidance of the Canadian resident, > can invest in Canada and get the 25% tax rate on dividends that is > favourable. Sure beats the pain of personal rates that can be 40% or > higher. Plus the business can get investment credits.
> Ottawa ignores it as the plutocracy that funds the parties we have > contribute generously to keep these holes open.
> > How (and Why) the Rich Get Even Richer! :CRA SOTW
> > Canada's offshore tax dodge > > Diane Francis, Financial Post > > Published: Saturday, May 03, 2008
> > For nearly 40 years, Canada's richest individuals have been able to > > get off scot-free from paying income taxes. So have their children.
> > The fix is not difficult and some areas where reforms can be imposed > > are outlined below. Even so, Canada's politicians and policy wonks do > > nothing.
> > Since 1972, a series of court decisions have attacked rules, eroding > > them to the point where rich people can move offshore for a couple of > > years, move back again to use our health care and other services, and > > still never pay taxes. Simple legislation would change this > > immediately by adopting U.S.-style rules.
> > But dodging taxes is easy: The taxpayer pays a one-time 25% hit on his > > wealth by declaring he is moving to a tax-free jurisdiction; he puts > > the direct management of his money in the hands of financial > > intermediaries or trustees. Canada Revenue Agency regards this as > > arm's-length offshore trusts and, therefore, untaxable when > > distributed, even back to Canada.
> > "It's easy to get out of taxes," said offshore expert and consultant > > Alex Doulis. "A wealthy Canadian will leave and become a non-resident > > for tax purposes, pay a 25% departure tax [on all his or her wealth > > except for the value of his principal residence or Canadian-based > > corporations] and never pay taxes again. They also have someone set up > > a trust offshore and put capital into it so their children or > > grandchildren can be sent distributions from the non-resident trust to > > Canada tax-free in perpetuity."
> > In other words, Canada's tax loopholes actually encourage departures > > because wealthy Canadians pay a one-time 25% taxation rate on their > > RRSP, which, if they did not leave, would net 46% personal income tax > > rates when withdrawn. The U.S. tax system does not allow such tax > > dodges.
> > Even worse, wealthy Canadians can dodge taxes but also still live in > > Canada up to 181 days a year. In other words, Canada Revenue Agency > > lets them have their cake and eat it, too: Cold months in the sun, > > warm months back home and all their money and investment profits tax- > > free. And their offspring and other beneficiaries never have to move > > offshore but can live completely tax-free in Canada on offshore trust > > fund income and be entitled to use Canada's health care, education and > > other services paid by taxpayers.
> > Canada also allows people to leave "permanently" for tax purposes, > > then come back without penalty. That's why it is not unusual for old > > expatriates, or those with serious illnesses, to return to poach off > > Canadians for health care because they are medically uninsurable > > abroad.
> > "Fortunately, for every one of these guys there are 10 of us who don't > > do this," said Seymour Schulich. "My family's here, my grandchildren > > are here and I made my money here. Say what you want, I think you owe > > allegiance to the place which gave you the opportunities. I would say > > to these guys who leave, 'It's okay to take your money and run, but > > don't ever come back.' "
> > Anyone who leaves Canada as a tax resident should be allowed to rejoin > > our health-care systems only if they pay a huge re-entry fee, > > equivalent to the taxes saved while abroad. That's what private clubs > > do when you take a leave of absence. Canada should do that, too. > > That's just for starters. Next week I will write about another issue > > of tax leakage and unfair entitlements that Ottawa ignores or is > > ignorant of.
> > --------------------------------------------------------------------------- -------------------------- > > Miss a Tax Tale Miss a lot! > > Follow the link to the new Canada Revenue Agency Story Of The Week > > index! > >http://groups.google.com/group/can.taxes/browse_thread/thread/0423e5e... > > --------------------------------------------------------------------------- ---------------------------- > >Alan Baggett- Hide quoted text -
> - Show quoted text - >Strange isn't it how tax 'loopholes' for the wealthy never seem to >close while those for the middle class get shot down almost as soon as >they become publicized.
The whole idea of the modern tax system is to support ever increasing government size. On this I am sure we agree. At some point, hopefully people will realize it as it robs wealth from the workers for the plutocracy.
The idea is to keep the worker class just making enough to motivate, but no more. Get a little extra cash and uncle Pierre/Ottawa will find a way to claw it back. Interesting how this perception is so well managed too.
For example, give people a government cheque, and they then support the big government. People do not view the $$$$$$ they pay in taxes for a crummy $100 tax deduction of their own money. This gets people to rally for a government cause like sheep. This I call the Pied Piper effect and believe the government actively does this.
Another one I like is the misdirection of gasoline costs. The reality is:
$2.50 gross earned income -1.00 income, EI, CPP taxes -0.20 costs of going to work ------------- $1.30 gross profit $1.30 for a litre of gasoline -0.65 for government royalties, taxes, GST, PST etc. ------- $0.65 actual product cost
So in effect, you need to earn $2.50 to buy a 65 cent litre of gasoline. Government gross profit is $1.65 per litre. Yet people complain because a company gets a few cents profit. And CBC will drum up the news if the profit goes up a cent or two for the oil companies. Could be the CBC wants to be sure their billion dollar plus subsidy comes through. It is also why Ottawa owns and controls the media.
For that tax, how many know how the government actually spends it? I bet few do. This might help even though it is from the devils mouth. Click on the like then play with the audio on. Next for each subsequent slice.
>> It is worse than that. They can live in Canada all year around like Paul >> Martin did. Even be the PM while you do it and get health care. When Paul >> Martian last adjusted the rules he made sure he didn't cut into his tax >> loophole. Just setup and offshore corporation, put the money in there. >> Until it is paid out, no reason to even declare it to the CCRA as no >> income >> or gains are realized until it is paid out or dissolved. Wish I had >> enough >> cash to justify the expense.
>> On top of that, the corporation, under guidance of the Canadian resident, >> can invest in Canada and get the 25% tax rate on dividends that is >> favourable. Sure beats the pain of personal rates that can be 40% or >> higher. Plus the business can get investment credits.
>> Ottawa ignores it as the plutocracy that funds the parties we have >> contribute generously to keep these holes open.
>> > How (and Why) the Rich Get Even Richer! :CRA SOTW
>> > Canada's offshore tax dodge >> > Diane Francis, Financial Post >> > Published: Saturday, May 03, 2008
>> > For nearly 40 years, Canada's richest individuals have been able to >> > get off scot-free from paying income taxes. So have their children.
>> > The fix is not difficult and some areas where reforms can be imposed >> > are outlined below. Even so, Canada's politicians and policy wonks do >> > nothing.
>> > Since 1972, a series of court decisions have attacked rules, eroding >> > them to the point where rich people can move offshore for a couple of >> > years, move back again to use our health care and other services, and >> > still never pay taxes. Simple legislation would change this >> > immediately by adopting U.S.-style rules.
>> > But dodging taxes is easy: The taxpayer pays a one-time 25% hit on his >> > wealth by declaring he is moving to a tax-free jurisdiction; he puts >> > the direct management of his money in the hands of financial >> > intermediaries or trustees. Canada Revenue Agency regards this as >> > arm's-length offshore trusts and, therefore, untaxable when >> > distributed, even back to Canada.
>> > "It's easy to get out of taxes," said offshore expert and consultant >> > Alex Doulis. "A wealthy Canadian will leave and become a non-resident >> > for tax purposes, pay a 25% departure tax [on all his or her wealth >> > except for the value of his principal residence or Canadian-based >> > corporations] and never pay taxes again. They also have someone set up >> > a trust offshore and put capital into it so their children or >> > grandchildren can be sent distributions from the non-resident trust to >> > Canada tax-free in perpetuity."
>> > In other words, Canada's tax loopholes actually encourage departures >> > because wealthy Canadians pay a one-time 25% taxation rate on their >> > RRSP, which, if they did not leave, would net 46% personal income tax >> > rates when withdrawn. The U.S. tax system does not allow such tax >> > dodges.
>> > Even worse, wealthy Canadians can dodge taxes but also still live in >> > Canada up to 181 days a year. In other words, Canada Revenue Agency >> > lets them have their cake and eat it, too: Cold months in the sun, >> > warm months back home and all their money and investment profits tax- >> > free. And their offspring and other beneficiaries never have to move >> > offshore but can live completely tax-free in Canada on offshore trust >> > fund income and be entitled to use Canada's health care, education and >> > other services paid by taxpayers.
>> > Canada also allows people to leave "permanently" for tax purposes, >> > then come back without penalty. That's why it is not unusual for old >> > expatriates, or those with serious illnesses, to return to poach off >> > Canadians for health care because they are medically uninsurable >> > abroad.
>> > "Fortunately, for every one of these guys there are 10 of us who don't >> > do this," said Seymour Schulich. "My family's here, my grandchildren >> > are here and I made my money here. Say what you want, I think you owe >> > allegiance to the place which gave you the opportunities. I would say >> > to these guys who leave, 'It's okay to take your money and run, but >> > don't ever come back.' "
>> > Anyone who leaves Canada as a tax resident should be allowed to rejoin >> > our health-care systems only if they pay a huge re-entry fee, >> > equivalent to the taxes saved while abroad. That's what private clubs >> > do when you take a leave of absence. Canada should do that, too. >> > That's just for starters. Next week I will write about another issue >> > of tax leakage and unfair entitlements that Ottawa ignores or is >> > ignorant of.
>> > --------------------------------------------------------------------------- -------------------------- >> > Miss a Tax Tale Miss a lot! >> > Follow the link to the new Canada Revenue Agency Story Of The Week >> > index! >> >http://groups.google.com/group/can.taxes/browse_thread/thread/0423e5e... >> > --------------------------------------------------------------------------- ---------------------------- >> >Alan Baggett- Hide quoted text -
>> - Show quoted text -
>>Strange isn't it how tax 'loopholes' for the wealthy never seem to >>close while those for the middle class get shot down almost as soon as >>they become publicized.
> The whole idea of the modern tax system is to support ever increasing > government size. On this I am sure we agree. At some point, hopefully > people will realize it as it robs wealth from the workers for the > plutocracy.
> The idea is to keep the worker class just making enough to motivate, but > no more. Get a little extra cash and uncle Pierre/Ottawa will find a way > to claw it back. Interesting how this perception is so well managed too.
> For example, give people a government cheque, and they then support the > big government. People do not view the $$$$$$ they pay in taxes for a > crummy $100 tax deduction of their own money. This gets people to rally > for a government cause like sheep. This I call the Pied Piper effect and > believe the government actively does this.
> Another one I like is the misdirection of gasoline costs. The reality is:
> $2.50 gross earned income > -1.00 income, EI, CPP taxes > -0.20 costs of going to work > ------------- > $1.30 gross profit > $1.30 for a litre of gasoline > -0.65 for government royalties, taxes, GST, PST etc. > ------- > $0.65 actual product cost
> So in effect, you need to earn $2.50 to buy a 65 cent litre of gasoline. > Government gross profit is $1.65 per litre. Yet people complain because a > company gets a few cents profit. And CBC will drum up the news if the > profit goes up a cent or two for the oil companies. Could be the CBC > wants to be sure their billion dollar plus subsidy comes through. It is > also why Ottawa owns and controls the media.
> For that tax, how many know how the government actually spends it? I bet > few do. This might help even though it is from the devils mouth. Click > on the like then play with the audio on. Next for each subsequent slice.
>>> It is worse than that. They can live in Canada all year around like Paul >>> Martin did. Even be the PM while you do it and get health care. When >>> Paul >>> Martian last adjusted the rules he made sure he didn't cut into his tax >>> loophole. Just setup and offshore corporation, put the money in there. >>> Until it is paid out, no reason to even declare it to the CCRA as no >>> income >>> or gains are realized until it is paid out or dissolved. Wish I had >>> enough >>> cash to justify the expense.
>>> On top of that, the corporation, under guidance of the Canadian >>> resident, >>> can invest in Canada and get the 25% tax rate on dividends that is >>> favourable. Sure beats the pain of personal rates that can be 40% or >>> higher. Plus the business can get investment credits.
>>> Ottawa ignores it as the plutocracy that funds the parties we have >>> contribute generously to keep these holes open.
>>> > How (and Why) the Rich Get Even Richer! :CRA SOTW
>>> > Canada's offshore tax dodge >>> > Diane Francis, Financial Post >>> > Published: Saturday, May 03, 2008
>>> > For nearly 40 years, Canada's richest individuals have been able to >>> > get off scot-free from paying income taxes. So have their children.
>>> > The fix is not difficult and some areas where reforms can be imposed >>> > are outlined below. Even so, Canada's politicians and policy wonks do >>> > nothing.
>>> > Since 1972, a series of court decisions have attacked rules, eroding >>> > them to the point where rich people can move offshore for a couple of >>> > years, move back again to use our health care and other services, and >>> > still never pay taxes. Simple legislation would change this >>> > immediately by adopting U.S.-style rules.
>>> > But dodging taxes is easy: The taxpayer pays a one-time 25% hit on his >>> > wealth by declaring he is moving to a tax-free jurisdiction; he puts >>> > the direct management of his money in the hands of financial >>> > intermediaries or trustees. Canada Revenue Agency regards this as >>> > arm's-length offshore trusts and, therefore, untaxable when >>> > distributed, even back to Canada.
>>> > "It's easy to get out of taxes," said offshore expert and consultant >>> > Alex Doulis. "A wealthy Canadian will leave and become a non-resident >>> > for tax purposes, pay a 25% departure tax [on all his or her wealth >>> > except for the value of his principal residence or Canadian-based >>> > corporations] and never pay taxes again. They also have someone set up >>> > a trust offshore and put capital into it so their children or >>> > grandchildren can be sent distributions from the non-resident trust to >>> > Canada tax-free in perpetuity."
>>> > In other words, Canada's tax loopholes actually encourage departures >>> > because wealthy Canadians pay a one-time 25% taxation rate on their >>> > RRSP, which, if they did not leave, would net 46% personal income tax >>> > rates when withdrawn. The U.S. tax system does not allow such tax >>> > dodges.
>>> > Even worse, wealthy Canadians can dodge taxes but also still live in >>> > Canada up to 181 days a year. In other words, Canada Revenue Agency >>> > lets them have their cake and eat it, too: Cold months in the sun, >>> > warm months back home and all their money and investment profits tax- >>> > free. And their offspring and other beneficiaries never have to move >>> > offshore but can live completely tax-free in Canada on offshore trust >>> > fund income and be entitled to use Canada's health care, education and >>> > other services paid by taxpayers.
>>> > Canada also allows people to leave "permanently" for tax purposes, >>> > then come back without penalty. That's why it is not unusual for old >>> > expatriates, or those with serious illnesses, to return to poach off >>> > Canadians for health care because they are medically uninsurable >>> > abroad.
>>> > "Fortunately, for every one of these guys there are 10 of us who don't >>> > do this," said Seymour Schulich. "My family's here, my grandchildren >>> > are here and I made my money here. Say what you want, I think you owe >>> > allegiance to the place which gave you the opportunities. I would say >>> > to these guys who leave, 'It's okay to take your money and run, but >>> > don't ever come back.' "
>>> > Anyone who leaves Canada as a tax resident should be allowed to rejoin >>> > our health-care systems only if they pay a huge re-entry fee, >>> > equivalent to the taxes saved while abroad. That's what private clubs >>> > do when you take a leave of absence. Canada should do that, too. >>> > That's just for starters. Next week I will write about another issue >>> > of tax leakage and unfair entitlements that Ottawa ignores or is >>> > ignorant of.
>>> > --------------------------------------------------------------------------- -------------------------- >>> > Miss a Tax Tale Miss a lot! >>> > Follow the link to the new Canada Revenue Agency Story Of The Week >>> > index! >>> >http://groups.google.com/group/can.taxes/browse_thread/thread/0423e5e... >>> > --------------------------------------------------------------------------- ---------------------------- >>> >Alan Baggett- Hide quoted text -
>>> - Show quoted text -
>>>Strange isn't it how tax 'loopholes' for the wealthy never seem to >>>close while those for the middle class get shot down almost as soon as >>>they become publicized.
>> The whole idea of the modern tax system is to support ever increasing >> government size. On this I am sure we agree. At some point, hopefully >> people will realize it as it robs wealth from the workers for the >> plutocracy.
>> The idea is to keep the worker class just making enough to motivate, but >> no more. Get a little extra cash and uncle Pierre/Ottawa will find a way >> to claw it back. Interesting how this perception is so well managed too.
>> For example, give people a government cheque, and they then support the >> big government. People do not view the $$$$$$ they pay in taxes for a >> crummy $100 tax deduction of their own money. This gets people to rally >> for a government cause like sheep. This I call the Pied Piper effect and >> believe the government actively does this.
>> Another one I like is the misdirection of gasoline costs. The reality >> is:
>> $2.50 gross earned income >> -1.00 income, EI, CPP taxes >> -0.20 costs of going to work >> ------------- >> $1.30 gross profit >> $1.30 for a litre of gasoline >> -0.65 for government royalties, taxes, GST, PST etc. >> ------- >> $0.65 actual product cost
>> So in effect, you need to earn $2.50 to buy a 65 cent litre of gasoline. >> Government gross profit is $1.65 per litre. Yet people complain because >> a company gets a few cents profit. And CBC will drum up the news if the >> profit goes up a cent or two for the oil companies. Could be the CBC >> wants to be sure their billion dollar plus subsidy comes through. It is >> also why Ottawa owns and controls the media.
>> For that tax, how many know how the government actually spends it? I bet >> few do. This might help even though it is from the devils mouth. Click >> on the like then play with the audio on. Next for each subsequent slice.
>>>> It is worse than that. They can live in Canada all year around like >>>> Paul >>>> Martin did. Even be the PM while you do it and get health care. When >>>> Paul >>>> Martian last adjusted the rules he made sure he didn't cut into his tax >>>> loophole. Just setup and offshore corporation, put the money in there. >>>> Until it is paid out, no reason to even declare it to the CCRA as no >>>> income >>>> or gai
