Tuesday, August 16, 2011

Enormous resources devoted to moving income to tax havens

HST, BC Liberal's generous gift to the corporatocracy, is having much less benefit for British Columbia's economy than pretended by governing politicians. Why? Because, like all mega-corps, the largest companies in BC, ones like Teck Resources and Goldcorp, have international affiliates through which they can shuffle funds to offshore havens.

HST relieved companies of paying provincial sales or consumption taxes. The saving is about $2 billion a year. That and more comes from the pockets of individuals paying HST. One might assume that a surge in profits from sales tax reductions would result in large BC businesses paying more income tax. Not so.

With operations scattered around the world, corporations are adept at having profits recorded where best sheltered from income tax. Suppose a BC mining company sells metals internationally. By foreign based trading subsidiaries, profits can easily be recorded elsewhere than in British Columbia. From the producer to the consumer, products can pass, on paper, through many jurisdictions with profits retained by trading affiliates in tax havens.

HST resulted in extra cost to consumers of $2 billion a year. A like amount, according to the BC Liberal Finance Minister, accrues to business and a significant portion of that sum is exported by companies that choose to reinvest or park the money overseas. A portion of the $2 billion that consumers who have spent in BC had they not paid HST sits in places like Hong Kong, Aruba, Switzerland or the other alternatives.

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2 comments:

  1. How many times do we have to say that. The giant corporations, make trillions on our resources, and put the money in tax free country's. This has gone on forever. For some reason, the citizens don't recognize that fact. We don't own our country, the giant corporations do.

    Why does Harper give, banks, mines, large company's, oil and gas company's billions of our tax dollars? That motion passed, right on the House of Commons TV channel. Why does Harper give these giant corporations huge tax reductions? He is stealing from the people, to give to big business. Harper is frantic to peddle the dirty tar sands, to as many country's as he can con into buying the dirty sludge. The huge oil company's, demand that he does so.


    Harper gave a speech on the NAU, In New York which he fully endorsed. He also gave a speech on, Global Governance. He fully endorses that too.

    But, for heavens sake, don't say the huge corporations are in control. You will be thought of as, not quite all there.

    ReplyDelete
  2. I guess having all that money parked offshore creates jobs though.

    Maybe just not in BC.

    ReplyDelete

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