Monday, January 25, 2010

Developments on the Swiss Tax Cheat Front

I suppose all readers of this blog probably already know about last Friday's decision by a Swiss court that holds illegal under Swiss law the agreement between the U.S. and Switzerland to turn over account information for a key category of U.S. taxpayers. For those who have not, I just point them to a some articles (see here and here) and make a few comments below.

I find it interesting the hyperbole that is surrounding this topic. For example, this posting on says that the president of Switzerland's Federal Administrative Court is looking to Parliament to resovle the issue of "whether tax evasion was a criminal offence." The reference is the interface of the Swiss law with the exchange of information provision in the double tax treaty with the U.S. The interesting quote is:
Bandli stressed that the cabinet was not the proper body to make that decision, which would effectively quash the principle of banking secrecy.
As I read this, the startling claim is that Swiss bank secrecy is all about enabling depositors to evade tax in other countries. I would have thought that there are plenty of rogues and brigands who have nontax reasons to hide assets (people do find other ways than tax to cheat and steal) and that Switzerland would continue to be a safe haven for them. But, of course, enabling depositors to cheat the fiscs of other countries is a major part of Swiss banks business. So, opening the kimono for tax cheats could have a major economic effect on Switzerland's ability to charge more for services than they are worth without the value added service of assisting them to cheat on their taxes.

1 comment:

  1. You call them tax cheats while the forefathers would have called them patriots. Interestingly some concern has been expressed regarding whether the Swiss will honor their tax cheat agreement with the IRS in the future. Of course the Swiss will honor the agreement. They are trying to shed all their U.S. customers and most certainly are accepting no new ones, problem solved. Oh yeah, paying progressive taxes is the American way or as John Stewart Mill called it democratized theft. Who cares if the unamended constitution made no such provisions or the forefathers slaughtered the British over a 5% tax rate. Who cares if you make up to $150K, 70% of your earnings goes to the liars and thieves in one form of a tax or another or when you die 55% of what ever you have left goes to the liars and thieves. Who cares if GWB ramped up government spending under Parkinson’s Rule to $3.4 Trillion with tax revenues of $1.9 Trillion annually such that $1.5 Trillion deficits will result annually for as far as the eye can see. Of course it is quite likely BO is gonna ramp up the deficits to $2 Trillion annually. How are the liars and thieves able to sustain such deficits, well in part, like their buddies on Wall Street the U.S. uses projected future earnings (tax revenues) to support the issuance of Trillions in debt; the only problem is those projections have more lies and accounting gimmickry than you can shake a stick at and make Investment Bankers quiver with jealous envy (of course Lay killed himself to avoid the results of his alleged accounting gimmickry which was mickey mouse compared to the U.S. government accounting lies). The U.S. definition of freedom is let the government know about every aspect of your life (and then some) and pay the government almost all the dough you make or; it is off for a life of ass rapin.


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