Friday, February 29, 2008

Tax abuse at its worst - when tax authorities steal

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According to an article in the Sydney Morning Herald on 1st March 2008, the Australian tax office is using information from a thief to mount an investigation into the tax affairs of some wealthy Australians. This is quite the paradox because it seems that Australia is providing political asylum to a German man who allegedly stole private information.

The disclosure comes as a result of the German government paying a former employee of a large Liechtenstein bank more than $6 million to provide a DVD with the bank account details for wealthy people. The German authorities were of course pursuing tax evaders, but they have since offered the information of citizens from other countries to their respective tax authorities. As a consequence some 20 wealthy Australians are being scrutinised for tax evasion by the Australian Tax Office after squirreling away up to millions each in undisclosed offshore bank accounts.

Heinrich Kieber, the alleged thief who is accused of stealing the private information has apparently fled to Australia to escape retribution from those he exposed. The German authorities has offered to share the bank account details on the DVD with any interested foreign government. The British tax authorities have already paid over $200,000 for information on 100 of Britain's richest families. The Australian Taxation Commissioner, Michael D'Ascenzo, refuses to confirm its sources but says that Australian investigations into tax avoidance had been under way well before the German raids. These investigations are part of a broader crackdown by the ATO on rich Australians seeking to avoid paying taxes by hiding money in several offshore tax havens. Yeh right. It must be so easy given that the German government had to resort to financing criminals to obtain the information.

The Australian government no doubt sees this as an opportunity to apply the ‘big stick’ to tax evaders. Under an amnesty, it is offering to reduce the penalties on those who voluntarily disclose their income or assets in offshore bank accounts. The ATO has already received 425 statutory declarations from people disclosing $17 million in offshore income. The Australian Tax Commissioner, Mr D'Ascenzo urged others with hidden incomes to come forward before it was "too late", warning they would otherwise face "the full force of the law". He said:

Well this is the ultimate threat rearing the ugly head of the tax office. You don’t hear about the threat, but here it is, the threat of slavery, guns, financial penalty and prison sentences. Australia has signed a tax treaty with Germany that allows for the exchange of information. But does that treaty permit Australia to benefit from stolen information? I want to know who the lawyer is for these 20 Australians. I want to help them fight the tax authories on this. This is EVIL at its worst!

Tax administrators in Canada, France, Italy, New Zealand, Sweden, Britain and US are also working together to identify accounts being used for tax evasion in Liechtenstein. The chief executive of Taxpayers Australia, Tony Greco, said the revelation would help entice fuller disclosure from wealthy Australians with bank accounts offshore. Clearly Taxpayers Australia is morally bankrupt or not an organisation that defends the interests of Australians.

More pressing are the legal ramifications of these actions for several reasons:

1. We have the governments of several governments profiting from the receipt of stolen information

2. We have the German government directly involved in providing support for private citizens of another country for theft of private information

3. We have numerous tax offices demanding that foreign banks disclose information on their respective citizens but they seem unprepared to disclose where their information comes from. Where is the accountability.

As a proud tax evader I fully support the efforts of these people to evade tax. Tax is no less evil than slavery, and these repugnant tax authorities are acting without contrition. Intimidation is being applied at its worst. There is no ethical framework that allows a person who opposes taxation to seek redress in the courts. Reason is not the standard of value, and until it is, then rational people have no recourse before the law. Tax law derives from legislation, and thus is held above Common Law that would otherwise protect these people. Ask yourself why this is possible. It serves the interests of politicians.

It occurred to me as an after-thought that these Western tax authorities have no intent of taking these rich people to prison. Its not about prosecuting criminals, its about setting an example. The tax authorities know that these rich people are well resourced, that they could be fighting these criminals in the courts for years, and that their cases will be thrown out of court. The tax authorities are not targeting these 20 Australians, they are targeting the 100,000 other Australians with assets offshore. The best way to do that is to have a 'show of force', to set an example. Dictators have been doing it for years to ensure compliance. And Australians are cowardly enough to accept this state of affairs, and unprincipled and unthinking enough to accept it. Its enough enough to look back at its convict era, but its more than being a nation founded on criminals, its a nation founded on a state support. People have always looked to government to fix problems. There has never been any great leadership as a result. Just snivelling bureaucrats and politicians who wait to see which way the electorate swings before they make a judgement. Apart from that, their loyalty lies in party loyalty, preserving the supremacy of the party, and the comfortable duopoly with the opposition.

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Andrew Sheldon www.sheldonthinks.com
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