As I was jammed into the TTC subway car this morning, barely able to breath for the crowd, I was pondering the decision of Bell Canada to convert to an income trust – and dodge an estimated $800 million in taxes in 2008.
Bell is not just gouging the public treasury – and the rest of us taxpayers. All those who use Bell services will also pay, because they shouldn’t expect that a penny of that $800 million taken from their payments will result in better service or lower costs.
Bell users are paying the bills, but it’s the anonymous investors who will make the big gains. No doubt the bulk of them will get good “tax advice” – ie. a group of sharp lawyers and accountants who will help them to dodge their tax obligations.
So, it’s lose and lose all around.
Taxpayers will see valuable revenue lost as yet another big corporation evades its tax duties.
Bell users will see valuable revenue lost as their payments are drained from the company to feed investors.
This is no way to run a country, and no way to run a company.
Bell is not alone. It’s just the latest in a series of corporations that are taking advantage of clever advice to dodge their taxes.
Bell is voiding the basic contract that forms the basis of incorporation. Corporations are fictional legal entities, created by legislation. The shareholders who create a corporate do so to avoid individual liability and to achieve all the rights of “natural persons”.
The deal is that corporations, in exchange for these privileges and rights, have some basic obligations that all other “natural persons” also have. Including the obligation to pay their fair share of the tax bill.
After all, corporations enjoy all the benefits of our fax-funded public services: They get to use the roads (and transit); they get to hire workers who receive a public education; they get to use the public health system; they benefit from the “peace, order and good government” offered through our constitution.
Bell Canada, like a growing number of other corporations, wants all these advantages, but they want someone else to pay.
It’s time to re-examine the basic corporate pact. If they are not prepared to pay their fair share, then perhaps they should be denied the rights of citizenship.
If corporations like Bell Canada don’t want to pay taxes, then let’s establish a fair system of user fees to charge them the cost of the public services that they are enjoying.
- Michael Shapcott
