Quote:
Originally Posted by DoubleF
I don't think you understand the type of nightmares that would be created by something like this. It would be beyond a police state dystopian nightmare.
The vast majority of people who participate in Canada's underground economy are not the ultra rich. They're basically like the blue collar guys working on your house for cash under the table. Those guys are more likely to not accumulate their wealth and instead blow that extra capital on substance and gambling addictions than they are on assets that actually retain value. The most valued possessions these people have are likely an assortment of used and beat up tools and some crappy pick up trucks. Some are servers not claiming their tips and they drink and party that money away.
These are some of the things that were discussed when the CRA was looking into some of the underground economy. Does it even make sense to try and make examples of certain people who are already in hard times? (ie: You can succeed with the claim, but then the person just ends up filing for bankruptcy). You also can't legally arbitrarily enforce on high income and ignore low income types. It's one hell of a challenge.
The CRA is also not a realtor or an auction house. Could you imagine if the CRA had a site to auction off #### they took? Call it TaxEbay... E as in evasion. Coked out exotic animals, orgy stained vans, burnt out houses with #### and piss in the HVAC systems, a dirty minivan with the car seats still strapped in the back... The CRA likely would have to destroy more than they'd recuperate in many of those situations.
This isn't even with the disputes of the value of things that CRA takes. There's already plenty of tax situations where the dispute is on the value of the asset, thus the amount of actual taxes owed to the CRA.
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Theoretically, there could be workarounds:
1. Crackdown on offshore holdings specifically.
2. Make penalties relative to the extent of the offence. If you get caught not reporting $1,000 in under the table work, the penalty is different than if you get caught hiding $1,000,000 in revenue. There's already precedents for this in the criminal law. For example drug and theft charges fall into different categories based on the amounts involved.