Newspaper article The Canadian Press

Editorial Exchange: Tax Evasion Hurts Us All

Newspaper article The Canadian Press

Editorial Exchange: Tax Evasion Hurts Us All

Article excerpt

Editorial Exchange: Tax evasion hurts us all

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An editorial from the Waterloo Region Record, published July 10:

Tax evasion is just plain wrong, and that's true whether the evader is a bank executive earning millions or a waiter who won't declare a five-dollar tip. A newly uncovered report from the federal government shows why this is so -- and why everyone in this country should oppose such deceptive, harmful behaviour.

A Revenue Canada audit discovered that over two years, 145 servers in just four St. Catharines restaurants hauled in nearly $1.7 million in tips that they did not report or pay taxes on. That worked out to about $12,000 in undeclared income for each worker -- income that should have been eligible for the taxation that pays for health care, education and all the other important services governments provide in this country.

It's astonishing and discouraging to realize that every single individual who was audited hid at least some of his or her tip income, while half reported earning no tips whatsoever. And the money in question was substantial for the workers involved -- amounting to between 100 and 200 per cent of their official income.

It's true that $1.7 million might seem a drop in the budgetary bucket of the federal or Ontario government. But it's a small piece of a larger and very disturbing puzzle.

Statistics Canada concluded that in 2008, hospitality industry workers in this country earned $1.3 billion in tips that they did not declare. Who knows how many heart operations might have been performed, how many teachers could have been hired or public housing units built with the legitimate government revenues from such earnings? And even this $1.3 billion is but a sliver of Canada's vast underground economy -- all the economic activity that goes unrecorded and untaxed by government.

There are plumbers, electricians and hairdressers, for instance, who charge less for customers who pay in cash, which is harder for governments to keep track of than payments through cheque, debit or credit card. And so such small business people evade taxes.

Likewise, many construction employers officially list their workforce as independent operators and side-step their obligation to pay taxes. …

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