The “dependent benefits” case for global, rather than territorial, taxation

This was interesting:  instapundit.com had a link to an article on Canadian immigrants who were a bit peeved that they couldn’t, after a trivial length of time, obtain Canadian citizenship as a fall-back while living and working elsewhere, e.g., in the Gulf states where jobs are plentiful but not permanent residence.

And there was a very interesting comment, copied in full below:

It’s not the passport per se. It’s the free healthcare and education. 

Vancouver has many so called satellite families who have the kids in Canadian schools while the father works in Asia without reporting income. It shows up in the data. Some years ago the richest post code in the country – West vancouver – started to have one of the largest child poverty rates. No one could figure it out because the average home is worth $2 million. 

Until you realize that the mother and children in the home collect benefits while the husband is overseas earning unreported income. This net cost is compounded when a family member – especially their elderly parents – enter the free healthcare system and incur an average cost of over $300,000 to the treasury. 

Immigration policy is clearly broken, but they are toying with a fix unlike the US which seems keen to completely shatter the concept of citizen until a permanently statist and Democrat electorate is created.

 Which would actually provide a rationale for the United States’ system of global taxation:  it prevents individuals from scamming the system when dependents claim benefits while the primary wage-earner is abroad and, as far as the authorities know, without income.  Of course, it’s more of an issue in a country with a greater degree of social welfare benefits, such as Canada’s single-payer healthcare system.  As far as schools go, in America, this sort of scam isn’t possible, to the extent that schools are funded by property taxes.  But I was tangentially involved in a question from a multinational client not long ago:  if an executive leaves France for another country, but his wife and children stay at home, are they still covered by their version of national healthcare?

Now, I still think that global taxation places serious burdens on people for what is in most cases a hypothetical future benefit, but it also does appear to be a problem that people can otherwise game the system.