If you ask Yannick Kergoat why it is so difficult to put an end to tax evasion by the wealthy and multinationals, he will tell you that it is probably because it is too closely integrated into the current economic system to be eradicated. Others are less categorical, but the French director can already help you better understand the nature and scale of the problem. And he will do so with pleasure.
After a documentary on the collusion between the media and political power (The new watchdogs), the director, screenwriter and editor wanted to make a film about the pitfalls of finance. With his friends, producer Bertrand Faivre and journalist Denis Robert, he chose to tackle the issue of tax evasion.
“It seemed like a good topic to us,” he explained in an interview with Duty Yannick Kergoat. Because of its economic, political and democratic importance, but also because it was sufficiently circumscribed to be able to make a film that was both educational and for the general public, capable of giving us a good time. Because after all, cinema is a spectacle.
The fruit of four years of work, The (very) great escape was finally released in France at the end of 2022. A bit like other films produced in recent years on economic and financial subjects, the documentary of just under two hours combines popularization work, position-taking and, surprisingly, humor and entertainment.
Quebecers will be able to judge for themselves. The film will soon be showing in a little over half a dozen cities, including Carleton-sur-Mer (September 22), Rimouski (September 23), Quebec City (September 24), Montreal (September 26 to October 3), Gatineau (September 28), Sherbrooke (September 30) and Salaberry-de-Valleyfield (November 27). True to a tradition dear to the heart of its director, the screenings will be followed by a discussion, this time with Quebec essayist and philosopher Alain Deneault.
Not an accident
The film shows in particular how tax evasion and avoidance have grown with the globalization of the economy, the dematerialization of finance and the rise of laissez-faire economic values. A dozen experts and privileged witnesses explain the clever stratagems and other accounting tricks used by the very wealthy and multinationals to shelter their money from tax.
Animations illustrate clearly and simply how this works. We are taken, with a hidden camera, to what Yannick Kergoat calls the “tax evasion show” in Cannes. Other cartoons and archive footage show politicians who constantly promise to tackle the problem while the rich and powerful continue to profit from the situation with impunity.
Since the film was primarily aimed at a French audience, there is a lot of reference to his country. But we quickly understand that the story is not so different elsewhere.
“The most important thing I learned is that tax evasion is not an accident or a perverse effect of the system that could be corrected,” explains the director. “It is an important cog in the neoliberal globalization.”
Around 8% of all global family financial wealth, equivalent to 7,000 billion euros (10,600 billion Canadian dollars), is thus in tax havens, reports in the documentary one of the leading experts on the subject, Gabriel Zucman. At the same time, multinationals send more than 600 billion euros (908 billion Canadian dollars) in profits there each year. This is not without causing a race to the bottom in tax rates between countries.
These tax havens are not all small islands with palm trees, it should be remembered. American states, the City of London, Ireland, the Netherlands, even Canada, also feature prominently in the roll of dishonour.
Those caught red-handed deny that they are breaking the law, but say they are only doing “tax optimization.” They can count on an entire tax consulting industry to help them find the best way to take full advantage of the loopholes and complicity in each country’s rules.
Fighting effort
But the 2008 financial crisis and the COVID-19 pandemic have added enormous pressure to public finances. People are increasingly fed up with being told that their governments’ coffers are empty while the rich and big corporations are not paying their fair share of taxes. This has led the G20 and the Organisation for Economic Co-operation and Development to try to convince governments to coordinate their fight.
After much negotiation and procrastination, more than a hundred countries have agreed, among other things, to a new mechanism for the automatic exchange of information on their citizens who open bank accounts abroad. More than 145 countries and jurisdictions are also in the process of implementing new rules forcing the largest companies to report where their operations, employees and sales are actually located, in order to ensure that they pay at least a minimum tax of 15% on their profits.
The documentary does not give much credence to this approach or take the time to explain and popularize it. All this is just a “time-wasting machine” invented by “pyromaniac firefighters” who have no real intention of changing the order of things, asserts Alain Deneault.
Another side of the story
However, this is not everyone’s opinion. Starting with Gabriel Zucman, who himself described the new rules targeting multinationals as “historic, insufficient and promising” in 2021. He said at the time that the minimum tax rate of 15% was “much too low, [mais] that nothing will prevent the continuation from quickly moving to 25%”.
In a study published this summer, the French economist from the University of Berkeley, California, also concluded largely on the success of the automatic exchange of information system aimed at catching wealthy individuals who hide their fortunes in tax havens. “These results illustrate the power of international cooperation to improve compliance with tax rules,” he concluded with four other experts. “Tax evasion is not a law of nature in a globalized world.”
Yannick Kergoat says he hears these points of view, but persists and signs. “It’s a victory that I perhaps haven’t sufficiently welcomed,” he admits. It’s true that it’s a first step in the right direction, but a very small step. We are still far from having resolved the problem of global taxation.”