My Blue Haven.

Janet Arnett is the former campus manager of adult education at Ontario’s Georgian College. She is the author of Antiques and Collectibles: Starting Small, The Grange at Knock, and 673 Ways to Save Money.

Given what the author perceives as the “draconian practices” of the U.S. and Canadian tax agencies, the pork-barrel nature of politics, and a society that favours women, visible minorities and welfare recipients, how is a humble white male with a few hundred thousand to invest supposed to make a buck?

Doulis has two answers. The first, for those 45 or older, is the bond market. In The Bond’s Revenge he promotes bonds as the investment choice because they have much less uncertainty than shares. Investors know in advance what return they will receive, and for how long. The market is complicated, however, so he leads the reader through terminology, the difference between bonds and “un-collateralized” debentures, government and corporate bonds, the impact of inflation on effective interest rates, how income trusts work, the function of bond syndicates, coupon-versus-yield, junk bonds, convertible debentures, hedge holdings, and other aspects of the subject such as short selling, call features, and zero-coupon (strip) bonds. Taxation is a big issue for Doulis. He touches on the market distortion caused by taxation policies and presents the theory that inflation is the most efficient and effective form of taxation.

His second answer to the how-to-look-out-for-yourself question is to go offshore to avoid income taxes. In My Blue Haven Doulis stresses that tax avoidance is not tax evasion, and with knowledge and effort the former can be kept legal.

He is cynical in his view of government tax collection practices and the use of tax revenue. Avoiding taxes, then, is justifiable “escape from tyranny.” His approach is to review the “juicy bits” of the Income Tax Act and proceed to teach “full-body-contact, industrial strength” tax avoidance. This includes information on the complications and costs of holding capital in offshore trusts, the wrinkle of Asset Protection Trusts, tax regulations in various countries, what makes a good tax haven, how to set up an offshore corporation to generate tax-free profits, and the issue of offshore investments and inheritance. There’s lots of specifics about Curacao, Caymans, Bermuda, Bahamas, and Turks and Caicos, plus mentions of Switzerland, Ireland, and other popular European tax havens. He touches on recent changes in Canadian tax procedures that target foreign holdings.

The work presents a strongly opinionated view of a complex topic. The stance is that Canadian health care and pension plans are doomed to fail soon and the investor needs to practice “financial judo” in order to look after himself first. As a result, the taxpayer is “at war” with the tax collectors (“tax extortionists”). As for the legality of his advice, Doulis notes that many details of the Canadian Income Tax Act are probably unenforceable and that in all things offshore, secrecy leads to security.

The two books use a storytelling style to give an overall introduction to the subjects. The book on bonds is a well-rounded, readable summary of a complex subject. The addition of other sources of information would be useful in order to achieve a balanced view of the offshore tax haven topic.