I don't know what's wrong with your hypothesis.
Basically, what you're saying, I think, is that there are a lot of tax fraudsters out there, and there's a lot of assistance from professionals and banks and so on. That takes us back to the issue of evasion and avoidance to some degree. In my experience as a practitioner, I did not see a lot of evasion. In fact, I think lawyers, accountants, and others in large, respectable firms will be the first to tell their clients that they'd better make a voluntary disclosure, for example. I've seen a lot of that, recently, that the client has confessed to having these assets offshore.
I don't know if they bear discussion here, but I think we have to recognize that there are many countries in the world—especially eastern Europe, Russia, and so on—that, when the Iron Curtain dropped, had no tradition of paying taxes on a voluntary basis. I've spoken to the Russian tax authorities. Here, we grow up with a culture that if you have income, the onus is on you to declare it. The onus is not on the government to discover it. If they discover you haven't declared it, then you have a problem. But basically, our system operates on the basis that we around this table declare what our income is. There was no tradition of that in the old Soviet Union or in the eastern European countries under communist rule. Those people had a totally different attitude towards it. Then all of a sudden it was “what is this business of taxation?”
In fact the Russian authorities told me they didn't even know who the taxpayers could be. It's an extraordinary situation. We have to rebuild from that base.
Of course that lends itself to probably an enormous amount of tax evasion in those countries. Much of that money might have found its way into jurisdictions like Switzerland, Cypress, and elsewhere.
Canada's in a bit of a different situation. Sure, there are bound to be levels of tax evasion and an underground economy. We all do estimates on that. But by and large, I think our system functions pretty well.