Saturday, March 14, 2009

Beginning of the end for tax havens. Swiss to hand over details of evaders.

The two tier world tax system, where the rest of us pay tax whilst the rich hide their wealth in secret accounts, took one of it's most serious hits in decades yesterday as Switzerland finally agreed to hand over it's details on wealthy clients suspected of tax evasion.

The move, described as historic by anti-poverty campaigners, came as ­international pressure, including action from Brown and Barack Obama, forced the world's tax havens to hand over previously undisclosed data on account holders.

In a remarkable week, Europe's secrecy jurisdictions – Liechtenstein, Andorra, Austria, Luxembourg, Jersey and ­Switzerland – all entered into international information sharing agreements.

Swiss ministers said the government caved in after learning the country was going to be included this month on a ­blacklist of uncooperative tax havens drawn up by the Organisation for ­Economic Co-operation and Development (OECD). Having agreed to sign up to the OECD protocol on tax, Switzerland will hand over information on account ­holders suspected of tax evasion by another country.

Until now tax evasion was not illegal in Switzerland and secrecy has been the bedrock of its economy.

Hans-Rudolf Merz, Swiss president and finance minister, said yesterday: "Co-operation on taxes has become more important given the globalisation of ­financial markets and in particular against the background of the financial crisis."

Switzerland is the world's biggest tax haven. The world's rich hide at least $1.89 tn (£1.35tn) of the estimated $7trn of ­private wealth there according to the Swiss Bankers Association, though others put the figure much higher.

There's always been something slightly disgusting about the very richest people in society being able to hide their wealth in secret accounts, shielding them from taxation, whilst the poorest members of society have their share taken from them at source.

When I was growing up the very term "Swiss Bank account" came to mean that a person was not only rich, but that they were rich enough not to pay taxes, which is a disgusting notion on it's face.

Obama has made cracking down on secretive jurisdictions central to his ­economic justice programme. ­

The fresh concessions by tax havens will not lead to full disclosure of the true ­beneficiaries of the complicated maze of sham trusts designed to confuse ­international tax authorities.

Campaign groups from all over Europe marched through Jersey's capital, St Helier yesterday. In a statement the aid groups demanded "a systemic change … to allow developing countries to get hold of the information they need … so they can stop the tax evasion".

The extent to which companies and individuals are using overseas tax havens to legally dodge tax has been exposed in the ­Tax Gap series. The investigation found that Royal Bank of Scotland used a series of schemes to avoid paying £500m to British and US revenues.

Many other FTSE-listed companies have also used complex financial structures to cut their tax liabilities to the British Treasury.

It won't be stopped in day, but Obama and Brown and others are at least loudly declaring the principle that it's simply wrong that the poor should pay tax at the full whack whilst the world's richest people and companies have access to a banking system which helps them to evade their responsibility and shields them from possible prosecution.

The days of the Swiss bank account meaning that one was above all the laws of taxation appears to be over. Hip, hip....

Click title for full article.


tom said...

The USA cannot bow to the wishes of the EU and their high tax regimes. the reason why they want the Swiss banks out of the picture is so they can raise taxes. Soon, we will follow. Those rich people would gladly pay some taxes. But not when the taxes are spent by a bunch of liberal baffoons.
The other banks in the world should emulate the Swiss, not try to destroy them. If all countries were "tax havens", the citizens would keep their money at home.
All these high tax liberal socialist countries would rather destroy the Swiss banks than to COMPETE with them. What happened to the US competitive spirit. Our desire to be competitive has been the reason why we are so great. Let's COMPETE with the Swiss. Let's have an incentive for our US citizens to keep their money in the USA. Let's beat the Swiss at their own game.
Senator Levin spent years trying to force the Swiss to give up the names of US citizens that have accounts at Swiss banks. If he would have spent all that time and our taxpayer money finding ways to COMPETE with them, we wouldn't be talking about it today. If the Swiss have no privacy, look for a world-wide surge in taxes

Kel said...

Those rich people would gladly pay some taxes. But not when the taxes are spent by a bunch of liberal baffoons.

Since when was taxation voluntary? That's tax evasion you are describing, and tax evasion is a crime.

All these high tax liberal socialist countries would rather destroy the Swiss banks than to COMPETE with them.

No, they want to compete with them but Switzerland are playing by a very different set of rules, refusing to recognise tax evasion which is a crime in most countries. Switzerland are aiding and abetting illegality, they must be stopped doing so; then, with a level playing field, true competition can begin.

jwberrie said...

The stupidity of this first person is boundless. Either that or he is being purposely duplicitous. Let's wait for Obama to actually raise taxes before we criticize him. The Bush tax cuts on the wealthy were set to expire anyway. Obama simply wants their tax rate to return to the Clinton era.

Kel said...

JWBerrie, what makes all this consternation so silly is that Obama is actually going back to Reagan's tax levels. You know, the ones they all applauded back then.