Avoid Taxes - Legally and Ethically

What to avoid taxes? Legally? I know a way, because I haven't paid income tax for years, and I pay very little in consumption taxes either.

Now that the Panama Papers have been revealed to the world, we are again reminded how the rich scam the system for their own selfish benefits. Our lame leaders tell us we have to accept austerity because "there isn't enough money", while billions, if not trillions, of dollars are being hidden from the taxman by pathological cash collectors.

I have something in common with those wealthy tax avoiders - I pay little very little in taxes. But I do it legally and ethically. In Canada, individuals with low income pay little to no income tax. I imagine that this is similar in most developed nations.

Not that I have a problem with taxes. A democracy will thrive when everyone pays their fair share. But I don't mind not funding war. Or corporate welfare. Or paying the way for rich people shirking their civic and moral duty.

According to a Tax Justice Network report from 2011, Canada loses an estimated $80 billion per year to all forms of tax evasion.

I also don't pay much tax in the way of consumption. Most Canadian provinces have a sales tax, and the one that doesn't, probably soon will. Nova Scotians pay 15% total sales tax (highest in the country) on most everything, except on things like some foods and pharmaceuticals.

I don't need an offshore tax shelter ran by sleazy big time law and accounting firms to avoid taxes. I just have to be comfortable living with a low income, and curtail my consumption.

Trying to buy everything by hiding your money  and avoiding paying taxes is a hassle, and in some cases illegal. Maintaining a low income and buying next to nothing to avoid taxes is easy. And within the law, as well as ethical. It is also good for the Earth.

Formerly Free Fruits of The Earth

The fruits of the Earth belong to everyone. Equally.

Everything used to be free. There are the good things, which are still free for now, but you will pay dearly for most everything else.

It's pretty hard to do anything without having to spend money. You have to pay to work, pay to play, pay to eat, and pay to sleep. If they could figure out a way to measure and charge you for the air you breathe, you would be paying for that privilege as well.

One thing I really don't like to pay for is to sleep. You even have to pay a nightly camping fee in the back country of national parks, seemingly far way from the tentacles of civilization and the economy.

Things are set up so that you probably have to break the law to sleep for free regardless of where you are. Until recently, it was illegal to be homeless in Victoria, BC Canada because it was illegal to sleep in the open anywhere in the city.

Private property. No trespassing. Do not enter. No overnight parking. Go away and spend some money.

In 1754 Jean-Jacques Rousseau wrote on the "horrors and misfortunes" that humanity suffered as a result of the invention of private property. In Discourse on Inequality he wrote,

"The first man who, having fenced in a piece of land, said "This is mine," and found people naïve enough to believe him, that man was the true founder of civil society. From how many crimes, wars, and murders, from how many horrors and misfortunes might not any one have saved mankind, by pulling up the stakes, or filling up the ditch, and crying to his fellows: Beware of listening to this impostor; you are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody."

I am sure the Genevan philosopher would be horrified at the misfortunes suffered by humanity today as a result of "Mine, Mine, Mine-ism".  A small group of humans claim they "own" the fruits of the earth, and the rest of us have to pay to access "their" resources.

Next the greedy will say they "own" the fruits of the Sun and the Moon. And the atmosphere. They will want us to pay them dearly for these formerly free fruits.

But let us not forget that the impostors are wrong. The fruits of the earth belong to us all, and the Earth itself to nobody.

We Call This Freedom Monday

This meme about our lack of real freedom reminded me of the American band Rage Against The Machine. True to their name, they are calling us to fight for our freedom, and our lives. They are promoting the importance of a major shift in the way we do things.

The way that guitarist Tom Morello describes our system makes sense to me. I, like most of us, have direct experience with what he is talking about.

He says, "America touts itself as the land of the free, but the number one freedom that you and I have is the freedom to enter into a subservient role in the workplace. Once you exercise this freedom you've lost all control over what you do, what is produced, and how it is produced. And in the end, the product doesn't belong to you."

He also figures that the number two freedom in America is the freedom to starve.

"What? 

The land of the free?

Whoever told you that is your enemy..."

- Rage Against The Machine, Know Your Enemy

Is Greed Still Good?

"Greed is right. Greed works."
- Gordon Gekko, in the movie Wall Street (1987)

In Star Trek the ultimate aggressive aliens are The Borg. They fly around space in big intimidating black cubes relentlessly consuming other cultures in order to enhance their own. While going about their ruthless business they repeat a tag line to their cowering prey - "Resistance is futile". The Borg are wickedly efficient at what they do, and are hard to stop. Just like capitalism and its proponents.

Knowing Gene Roddenberry, the creator of Star Trek, he meant the all-powerful Borg to represent the culture of the 'free market' system. I was reminded of that today when I flipped through one of my old journals and found a quote from a great book I read two years ago. I can see why I wrote the quote down as it sums up my feelings toward societal conventions very well.

The quotation is from Greed Inc. by Wade Rowland. In it he argues that capitalism, as outlined by Adam Smith in The Wealth Of Nations, is founded on an erroneous basis. In his book Smith states that self-interested behavior can be accepted and applauded if it leads to the betterment of society as a whole. Therefore, as Wall Street boasted in the 1980s, "Greed is good" because a rising tide lifts all boats. Or that is what they would like us to think.

Wade Rowland disagrees about the supposed universal benefits of greed in a capitalistic system, and points out that we do not always act with our own selfish interests in mind. Our current economic system is not as natural as its proponents would like us to think:

"The training to obey the work and consumer ethic has taken place against the grain and in the face of enormous resistance. We now look upon that resistance as not just futile, but immoral. The Luddites are dismissed as criminally obtuse, and anyone who confesses to being content with what is sufficient and unwilling to work and earn and consume beyond that level of sustenance is dangerously antisocial and morally impaired by Sloth."

Rowland goes on to say, "Our economic system was designed to institutionalize and rationalize the vice of avarice, and it does this with wicked efficiency". Avarice is one of the original deadly sins. It means "reprehensible acquisitiveness". It is something to be avoided, not something to base an entire global culture on. Our current system leaves billions behind. Not all boats are rising, and many people are drowning.

Even Adam Smith himself admits that if egoistic behavior does not lend itself to the public good, then it ought to be stopped. Our current system, then, ought to be stopped.

The Borg are wrong, as are the Wall Street suits - resistance is not futile. In the end, I side with philosopher David Hume and his belief that powerful moral sentiments will guide us as we act together for the greater good. The ideals that he says are the antidotes to greed? Love, friendship, compassion, and gratitude.

Is greed still good? Was it ever? If we focus on love, friendship, compassion, and gratitude, everything else will take care of itself. They will overpower greed and change our world. Competition is yesterday's brutal game that manufactured winners and losers. I see us evolving toward a better, more cooperative future in which all can win. Good riddance greed.

No Mischief Monday

We Can Do Better Than This

As I was reading the newspaper the other day I noticed two images similar to the ones above side by side in a features section. Were they intended to be juxtaposed in order to jolt our reality chip, or was it just a sick mistake? It reminded me that the gap between rich and poor continues to widen.

If we were starting from scratch, is this really the kind of world we would design for ourselves? One in which a few have multiple homes including hundred-room mansions on acres of park-like gated property, while millions live in mud and squalor?

"Unlit highways run past canyons of smouldering garbage before giving way to dirt streets weaving through 200 slums, their sewers running with raw waste. So much of the city is a mystery. No one even knows for sure the size of the population – officially it is 6 million, but most experts estimate it at 10 million – let alone the number of murders each year [or] the rate of HIV infection.

Lagos, moreover, is simply the biggest node in the shantytown corridor of 70 million people that stretches from Abidjan to Ibadan, probably the biggest continuous footprint of urban poverty on earth." http://www.ranadasgupta.com/notes.asp?note_id=31

And the problem is not getting any better in spite of developed nations paying plenty of lip service to the elimination of poverty in recent years. The "State of the World's Cities - 2010/2011" report by the Nairobi-based UN-HABITAT shows that the number of slum dwellers has been increasing due to unequal access to peace and prosperity for an increasing number of the world's citizens.

Number of slum dwellers skyrockets By Bradley Brooks, THE ASSOCIATED PRESS

SAO PAULO, Brazil - The number of people living in slum conditions increased by 51 million during the past 10 years, despite global efforts to halt poverty, according to a United Nations' report released Friday.

The report by the Nairobi-based U.N.-Habitat said that the number of slum dwellers rose to 828 million in 2010, while also noting that about 227 million people were able to escape such conditions in the past decade - double as many forecast in the U.N. Millennium Goals set in 2000.

"Success is highly skewed toward the more advanced emerging economies, while poorer countries have not done as well," said Habitat executive director Anna Tibaijuka. "For this reason, there is no room for complacency." http://cnews.canoe.ca/CNEWS/World/2010/03/19/13295831-ap.htm

The following statistics on Poverty and Inequality highlight a system that is not working for a majority of humanity.

"While global GNP grew 40 percent between 1970 and 1985 (suggesting widening prosperity), the number of poor grew by 17 percent.

UNDP reported in 1996 that 100 countries were worse off than 15 years ago.

In 1998, that 20 percent of the world's people living in the highest-income countries accounted for 86 percent of total private consumption expenditures while the poorest 20 percent accounted for only 1.3 percent. That's down from 2.3 percent three decades ago.

These related phenomena led UN development experts to observe that the world is heading toward "grotesque inequalities," concluding: "Development that perpetuates today's inequalities is neither sustainable nor worth sustaining."

UNDP calculates that an annual 4 percent levy on the world's 225 most well-to-do people (average 1998 wealth: $4.5 billion) would suffice to provide the following essentials for all those in developing countries: adequate food, safe water and sanitation, basic education, basic health care and reproductive health care. At present, 160 of those individuals live in OECD countries; 60 reside in the United States.

The wealth of the three most well-to-do individuals exceeds the combined GDP of the 48 least developed countries.

The United Nations Development Program (UNDP) reported in 1998 that the world's 225 richest people have a combined wealth of $1 trillion. That's equal to the combined annual income of the world's 2.5 billion poorest people." http://www.globalpolicy.org/component/content/article/218/46377.html



We created this unjust and unequal system and we can create a new one which is more equitable and inclusive. The lives of billions depend on us doing the right thing. Will we disappoint them yet again, or is now the time we are going to take actions to start living right on this planet?

A Few Have Too Much, Many Have Too Little - You Can Help

"There can be no peace as long as there is grinding poverty, social injustice, inequality, oppression, environmental degradation, and as long as the weak and small continue to be trodden by the mighty and powerful."

- 14th Dalai Lama

Some countries have too much money. Some countries don't have enough. Both are detrimental. The current gap between the rich and the poor is a bubble about to pop. How long can the richest 20% of the planet's people consume 76.6% of the world's resources while the poorest 20% consume a meagre 1.5%? This situation spawns poverty, despair, and terrorism.

The good news is that this was an improvement over 1995 when the richest 20% consumed 88% of the world's resources. Some one must pay for the rich lifestyles we live in industrialized, wasteful, consumer-oriented countries. Currently, the poor and the environment are paying our way, but this is likely to change soon. We are reaching several critical points, peak oil and climate change being two. More importantly, people are beginning to hop off the money train after finding it was not all it was cracked up to be.

You may wonder how one could have too much money. Our cultural credo is you can't have too much money, or fame, or thinness, or toys. It is wrong. Witness the Toilet Paper Abundance Syndrome, which I will use to illustrate my point.

When you have a closet full of toilet paper, a TP glut if you will, your tendency will be to use say, 7 to 25 or more squares. But make that the last roll of TP in the house and you will find that 3 to 5 squares may suffice.

When we have too much money we indulge in senseless waste, often as a way to feel and show our wealth. It is an evolutionary thing, so understandable, but now we know better. I would like to think our higher-order brain is in charge, not our emotions and base instincts. No, the conspicuous consumption beast is dead (2008 RIP), and you can help put the final nails in the lid the coffin.

How? By how you live. Waste not, want not. Don't make the environment and the poor pay for your extravagant lifestyle. Consume less. Save money. Share some of it. Use resources carefully - they are precious. Make demands of your politicians, and tell them you want a more equitable, sustainable community, and world.

Civil rights came about because the people demanded it. Universal suffrage happened because the people demanded it. When the people band together to right wrongs amazing things can happen. A better world is evolving, but ongoing improvement must continue to come from the people. We have the power.

A few have too much, and many have too little. You can help. Let us live simple, sustainable lives so that others may live at all. Let us mourn the consumeristic, planet-killing beast and move on. We already know what to do, and we have more than enough money. All we need is the will, and that begins within each one of us.

Investing Without Wealth Or Calamity: The Finances Of Enough

"Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas." - Paul Samuelson

Individuals lucky enough to have a bit of savings are asking hard questions about their money after the 2008 financial collapse wiped out trillions of dollars of personal net worth. There is a move toward post-traumatic stress investing; a cautious, less greedy way of investing in order to avoid the kind of trouble we have seen lately. Such an approach will avoid extreme wealth as well as extreme calamity, both of which are unbalanced ways to live and best avoided.

It is a good time to be returning to a concept of 'enough'. Good-bye get rich quick risky business, hello slow and certain. My financial goal is not to get the highest return and damn the consequences. At one time people were satisfied with a modest return on investment. Any more would have been considered immoral at best, and illegal at worst.

Therefore, my No Extreme Wealth/No Calamity strategy focuses on:

1. Reducing the potential for financial calamity. Higher risk investments pay higher returns, usually, but can also experience higher losses.
   
2. Investments that improve global social and environmental health. I want to know that my money is supporting solutions rather then enabling problems, even if the 'dirty' investments pay a better return. Are my hands clean?
   

The following information, from David Trahair, agrees with a low risk strategy. In "Buy GICs. Only GICs." in The Globe and Mail, September, 2009, he points out the following average annual rates of return:

S&P/TSX Composite Total Return Index

• 10 years to August 31, 2009 - 9.41%
• 20 years to August 31, 2009 - 8.86%
• 30 years to August 31, 2009 - 10.76%
• 40 years to August 31, 2009 - 9.77%
• 50 years to August 31, 2009 - 9.80%

GICs

• 10 years to August 31, 2009 - 3.35%
• 20 years to August 31, 2009 - 5.11%
• 30 years to August 31, 2009 - 7.28%
• 40 years to August 31, 2009 - 7.71%
• 50 years to August 31, 2009 - 7.35%

The Wall Street Journal seems to agree about the reality of stock market investing these days. They reported that the first decade of the 2000s was the worst ever for American stock market investing.

"Investors would have been better off investing in pretty much anything else, from bonds to gold or even just stuffing money under a mattress. Since the end of 1999, stocks traded on the New York Stock Exchange have lost an average of 0.5% a year thanks to the twin bear markets this decade."

Stuffing money under a mattress? Now there is an investment strategy that I can both understand and support. One will not experience riches, but one will avoid calamity. Without riches and calamity there is less potential for trouble. And trouble is something many people have been experiencing lately.

The returns of a low risk strategy may be lower, but you have to also factor in the ease of GICs, and the peace of mind you have when you step off the stock market roller coaster. You will not get rich, but you will also not lose 50% of your personal wealth over the course of several days in the event of another near-death experience for capitalism. Free market troubles are not close to being over yet.

For me a guaranteed, small interest rate is preferable to a large unearned gain that is harmful to all, and has the potential for massive losses.

No wealth, no calamity, no trouble. This works for me.

The Mean And The Greedy

Meet Michael Martin, former speaker of the British House of Commons, and current poster child for avarice while sucking from the public teat. He has been ousted now, the first speaker to be kicked out since it last happened in 1695. At that time Sir John Trevor was sacked for taking bribes.

Rodney Barker, a professor of government at the London School of Economics, said Mr. Martin's departure shows Parliament is taking reform seriously.

“It won't solve anything at all, but if his successor could appear to be taking charge of things in a way that implements proper procedures, probity, and decent use of public money, that would be the very opposite of Michael Martin's position,” Mr. Barker said. “He has been seen as a supporter of the most greedy and the most mean.”

Is it not time we quit supporting the most greedy and mean among us? Speaking of which, the politicians here in British Columbia are busily following the same agenda. The minimum wage in this province has not increased in a decade, and welfare rolls are up almost 50% over last year. It is in this climate that the BC Liberals voted themselves generous wage and pension increases. The leader of the party, Gordon Campbell, gave himself a whopping 54 per cent wage hike -- a $89,000 raise.

Now the NDP in the BC legislature have decided, after initial opposition, to also take the wage and pension package. If the Green Party had a few seats in the legislature (and they would if we had opted for the Single Transferable Vote system in the referendum), I wonder if they would have taken the increase?

Our current system was made by humans, therefore humans can change it for a model more in line with our times and our current level of evolution. If we were starting out now, can you seriously say that the current system is the one we would choose to build for ourselves? A system in which the richest 2% in the world possess over half of all household wealth? Is this what we would vote for?

Or do the richest 2% somehow "deserve" such wealth? Don't they earn it, fair and square?

"Earned does not mean deserved. Due to the law of conservation of energy, one cannot gain wealth without taking it from somewhere. Due to the misfortune that nothing of value exists on this planet without some form of human claimant, all wealth must come about through exploitation of one human by another. So try to imagine how 2% of the world have come to acquire half of the world’s household wealth…or how they ‘earned’ it. Then try to understand the incredible violence that a word like ‘earned’ suggests." - Devin


Show me a great concentration of wealth and I will show you crime and corruption. That is the nature of our current system. What can you do? Be a rebel. Right now one of the most subversive things a citizen can do is stop buying stuff. Keep your money in a jar in the back yard. Do not support the mean and the greedy. Stop buying their stuff.