Slashdot Mirror
Swiss Bank Secrecy Under Renewed Attack
Stanislav_J writes "All you wealthy Slashdotters better start making alternate arrangements for stashing your millions. Switzerland's storied role as discreet banker to the world's tax-avoiding wealthy is under threat like never before, and this time the country ultimately may not be able to stop the rest of the world from prying into those legendary 'secret' accounts, said to contain between $1 trillion and $2 trillion. A massive German tax-evasion scandal is putting pressure on the Swiss to cooperate, and the rest of Europe is also hardening their resolve to force change upon them. Per the article, 'The official Swiss reaction has been self-conscious detachment, which they hope will deflate the issue,' but even their own citizens are not too concerned about those outside their borders: 80% of Swiss support the banking confidentiality law, but that number drops into the 40s when it is applied to foreigners. Pressure is also coming from US pols — not the 'let's pry into everyone's business' Republicans, but the 'make the rich pay their fair share' Democrats, including Illinois Senator (and presidential candidate) Barack Obama."
But downright wrong when it enables someone to evade taxation like the rest of us. Striking a balance will be a difficult task.
"To those who are overly cautious, everything is impossible. "
You can't have it both ways. It's like trying to say "oh, secrecy is great, but not when it allows THE TERRORISTS to run amok!"--just find some reason to point out why secrecy allows some perceived ill to take place and then you can easily get rid of it for everything, because you can't have secrecy only for "good" things and "no secrecy" for "not-good" things. If you have secrecy, then yes, you're going to have people break the law to use that secrecy... and, being shielded by secrecy, people aren't going to know if you're being good or bad. Also, I see no problems people allowing people to evade taxation "like the rest of us". Why shoot yourself in the foot?!
The Swiss economy is basically subsidised by victims from the rest of world.
Chaos - everything, everywhere, everywhen
I'm sure that since this time it's the Democrats wanting to get into people's secrecy, it must be all just a big misunderstanding.
This statement actually surprised me:
During a meeting of his Rotary Club in Zurich, his fellow members were appalled that Swiss bankers might be managing the money of foreign tax evaders. "We had no idea," Mr. Hummler recalls them saying, "that you did things like that."
I don't pay a hell of a lot of attention to financial news, or banking laws.. but even _I_ know that the Swiss have built a long reputation on providing accounts to foreigners trying to avoid taxes in their home country. Isn't this just common knowledge? I'd think it'd be even more common knowledge in Switzerland.
AccountKiller
the fact is this is total bullshit, the top 1% in america pay almost 50% of the tax, and avoiding this is IMPOSSIBLE. and the reason it's impossible to dodge is tax departments around the world have these nice little laws which allow them to investigate you and tax you based on what they THINK you should be paying. so hiding offshore does them fuck all good
http://www.rushlimbaugh.com/home/menu/cy2003.guest.html
If you mod me down, I will become more powerful than you can imagine....
Do we have the right to unethically extend freedom of speech to foreigners? The right to banking privacy is considered a defense against government tyranny, just as Free Speech.
While I personally think that the cost's of banking privacy do not justify the benefits, that is a discussion for the Swiss. But while they hold these values, they have just as much right to hold the rest of the world to their values as we do to ours.
I know you're just joking, but switzerland is actually armed to the teeth. Everyone there is armed, most men train or have trained for the militia. They're obviously too small to fend off a super power, but definitely tough enough to make an invasion not worth it.
Let me fix that for you:
sed -i s/scumbags/politically disadvantaged minorities/ $GP
There, that's better.
Either privacy of commerce is a right or it isn't. If you really want to give that right up, I'm sure there are plenty of governments that would appreciate it and might even give you a sticker or a stamp to replace that pesky liberty you relieved yourself of.
<script>alert("I never liked JavaScript, really; it just seemed a bad idea.");</script>
Tax evasion is not Liberty - it's criminal activity. Responsibility and accountability comes with this thing "Liberty" you toss around so haphazardly.
Horns are really just a broken halo.
I simply think that anytime you lose any privacy such a tradeoff exists and should be considered. It's not about the government now in a country covered with rights and freedom. It's the government in the future, when it finally collapses into a power hungry corrupt mess, or in an existing country that makes feudal Europe look freedom filled. How ironic. You are making the same assumptions about my post that you claim I am making about yours. Read my post again. I didn't express rabid hate nor did I assume you supported a single side. Any assertions that you took were open ended questions marked by question marks such as "Do you honestly think Switzerland is implementing these privacy provisions to protect oppressed foreigners?" Afterwards I discussed the ethical issues involved like you wanted in this post. The question I need to ask you now is have you read the post or have you mistakenly responded to another post?
If you responded to the correct post it is absolutely essential that you cite how I think that it is "impossible to question something unless you rabidly hate it" or how I think that "everyone [must] hold the party line unwaveringly".
Flat taxes and consumption taxes most certainly *DO NOT* work. THey're highly regressive, effecting the poor far more than the rich.
Take a rich man who makes 1 million a year, and a middle class man who makes 40K. Lets say the tax rate is 20%. With a consumption tax, the guy with 40K will likely need to spend 33K on food, clothing, shelter, entertainment, etc. He'll pay 20% taxes on that, adding up to 6,600 dollars. He basicly breaks even. The rich man may spend lavishly, and spend 300K. He'll pay 60K in taxes. The rest he saves. He only paid 60K taxes, a mere 10x the poor man despite earning 25x. This shifts the tax burden onto the poor. This is not acceptable.
Now take a flat tax. There's two types of flat tax- flat by rate, and flat by dollar amount. If you have flat by dollar amount, you have the same problem as above, but magnified- it will likely be 50% or more of the poor man's salary. If you do a flat rate, you haven't solved any of the problems of the current system- you still need to figure out how much he actually made, and he still has incentive to hide it.
Flat taxes just don't work. Consumption taxes, while they are technically possible, don't work socially- far too regressive. The only people who really think either of these are a good idea are those who are already rich and have the "Fuck you, I got mine" attitude, and those who don't understand math.
I still have more fans than freaks. WTF is wrong with you people?
There is a tax evasion crime in germany that reached the media and now is a 'scandal', that crime is linked to one of those 'law abiding banks' so how can you assure they are law abiding accounts if they are under secrecy?
Now Mr. Hummler says "What is going on is a power play,... so what? is that supposed to be a valid excuse to protect a criminal investigation? Just because economic "powers" are involved? Economy is the root of all crimes! No one commits it as a hobby.
Libertarians whole heartedly do not care about the public good
That's a rather vicious smear, not to mention being a baldfaced lie. Libertarians care far more about the public good, particularly about our freedom, than those on the right or left who constantly seek to increase the power of the government. We've noticed that the freer we are, the better off we are.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Well, I'm not Swiss, but I worked at all the major banks in Switzerland (and work in one presently).
The bank secrecy has been a boon to the Swiss banking industry. Make no mistake, not only has this created jobs, but it also works as a "Sozialamt", because a bank will employ up to five people (mostly Swiss, of course) to do the job of one single person, all the while the five will whine how "overloaded" they are.
If the Swiss banks didn't have the banking secrecy laws, at miserable (and laughable) 1.85% interest, it wouldn't be interesting to siphon money into Switzerland, so about four in five of your countrymen wouldn't have a job, and couldn't take their expensive vacations two to three times a year!
As expensive and as inefficient and as bureaucratic as things are in Switzerland, what do you think, where did the money come to pay for this huge, inefficient system come? From foreigners siphoning money into Swiss banks because of the secrecy laws!
So if Confederatio Helvetica abolishes bank secrecy laws, Switzerland will be severely busted.
How then are you guys going to pay for those 2-5 expensive vacations per year? And where are the other four guys going to go? Let me remind you, your conuntrymen consider themselves above menial jobs, like the Baustelle, or Kellner...
Oh, won't someone PLEASE THINK OF THE TERRORISTS!
geeze. i can't believe how blind some people are. as has obviously been pointed out before, the Swiss provide a financial anonymization service. they have removed their own imperfect judgement of what constitutes right and wrong and simply act in good faith for their clients. yes, sometimes this system is abused (nazi gold and various tax evasion schemes, etc), but the principles of the system are no different than you wanting privacy for all users of the internet, for wanting secrecy in your instant messaging systems, deniability, the rights to use the Internet for whatever purpose you choose. the issues here are all the same. some people will use the system for the benefit of the public good while others will use it for their own selfish purposes at the expense of the public good.
if the "good guys" haven't caught on to the fact that they can exploit the system the same way as the "bad guys" then it's only their fault for missing the opportunity.
check out my comic: Essential Tremors
Well, I personally think the wealth in our country can be attributed to many things, one of them are banks which made some people super rich, this inflates the statistics. There are huge tax cuts for rich people, this is why some many foreigners officially live here, that's another reason statistics are inflated.
IMHO the wealth mainly comes from my parent's generation. the after WWII generation(s) has been working hard, this has changed.
I hear the argument "if we give up banking secret we will loose many jobs" for a long time. this is the main argument of the supporters. Problem is; although the banking industry is large (compared to other conuntries) it is still very small compared to other industries. Because they are multinational companies, only a (small?) part of their employees works in switzerland. There are companies which actually produce something, these companies employ the majority of people.
However, you are right. Abandoning the banking secret will have an impact, banks would move on and some people will loose their job or would move with the company.
The problem is, on the other hand, we get constantly in trouble about the banking secret, paying punishment tax which are not necessary. Instead of paying these tax to foreign countries, we could pay the unemployed instead.
After all, I believe it when I see it. Banking secret will not be given up so quickly (it is beeing debated in the media every 5 years or so since i am alive). It has been a "problem" for decades, banks make a lot of money, have a strong lobby. I highly doubt this will happen now.
Kind regards,
-S
Uh, are you suggesting that the rich man never spends that $700K? If so, then he is the biggest idiot in the world -- he took 70% of his money and instead of using it to improve his life, he put it in a bank account someplace, never to see the light of day. Might as well shred it. Otherwise, when he spends it, which he will eventually, it will be taxed.
In a real case, that guy making $1M probably spent nearly all of it, not $300K. Sure, it's possible to live below your means, but very few people, including "the rich," actually do.
IV
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
The protection of Liberty makes prosecuting criminal activity more difficult. Some of us believe, with good historical evidence I think, that criminal activity is rarely as dangerous to the citizenry as an unchecked government.
http://marriedmansexlife.com/
Free speech and banking privacy are not the same. Bringing up free speech is nothing but a straw man argument. Yes, free speech is necessary to protect against government tyranny. But no, free speech is not equally as important as banking privacy.
It should be remember that Switzerland is a direct democracy. If the swiss government were to change the laws, it is very likely that the SVP, a swiss right-wing party, would force a public vote on the issue. Personally, I think there's a good chance that the swiss people would vote against their own government and keep the law as-is, international treaties be damned. There is jack shit any other country can do to influence the outcome of this; in fact, pressure from governments like the US government would have the opposite effect and help keep the current law.
> but the principles of the system are no different than you wanting privacy for all users of the internet
That is the stupidest dumbest fucking analogy I have EVER heard.
A vastly more accurate analogy would be if there were laws in all other western countries GUARANTEEING anonymity of internet traffic above all other laws - such that even if the police had records that a certain IP Address was used for grossly criminal purposes they would NOT be allowed to obtain warrants for the people holding and using those IP Addresses.
The "privacy" you have in your internet communications currently matches your "privacy" in your banking in all western countries(*), EXCEPT Switzerland - where you can commit ANY crime you want using their financial system and ALL other countries have no legal recourse what so ever.
I have not heard ANYONE arguing that one should be able to commit crime via the internet WITHOUT LEGAL RECOURSE by the authorities. Only that by DEFAULT without court orders, your communications should be privileged and private. IE: Facebook and Google have no right to divulge your private data without your permission - same as your bank.
I hereby declare that "atomic brainslide" is OUTRIGHT STUPID, if we ever establish a meritocracy he should not be allowed to hold office or vote.
(*) Your data is private, unless someone who is involved determines that you've committed a crime and forwards the information to police - aka Facebook notes that your private data is kiddy porn, or your bank has reason to suspect that you are laundering money. They tell the police, the police get court warrants, etc etc.
I'd give everyone worth over a billion dollars lifetime tax amnesty, just out of spite!
</quote>
And they built those Mega empires on nothing? No infrastructure, no interstates, no railroads, no canals?
Many of which were paid for by government sponsorship, either federal, local or state.
All of whom would have nothing if not for ALL of those bloodsuckers.
I think the US is hardly in a good ethical place to start putting pressure on Switzerland. The US is no longer a democracy (unless you're telling me you really support what Bush is doing), doesn't seem to understand collaboration rather than trying to impose laws (various entertaining events such as DVD Jon in Norway), and ethically there's a bit of a problem as well - every time a new batch of information is released about what the secret services have been up to it appears the US has been sponsoring terrorism rather than fighting it.
Let me give you a little example of where problems appear. Bush has exempted himself from a good 1100 laws or so (Google for "signing statements") - in which democracy is someone allowed to be above the law and above oversight from those that elected him? This thing in Germany is rather fun too, because the tax office appears to have been elevated above German law as well - it is normally ILLEGAL to handle or facilitate the handling of stolen goods under German law, yet the German tax authorities didn't just buy it, they re-distributed it as well. In other words, it's now OK to steal data because all you have to do is find a gov. department that's interested. Well, that certainly hasn't helped fighting data crime, the price for stolen info (and that could be from the US illegal operations as well) has just shot up, STIMULATING this sort of crime.
There's this funny thing about laws in a democracy. As soon as you elevate a chosen few above it you no longer have a true democracy. Switzerland is about the ONLY country left where the laws are still decided by all, in a normal, flat vote which doesn't rely on artificial tricks to prioritise one club above the other, nor do they use electronics unless they're absolutely sure they cannot be manipulated (if I'm not mistaken you're busy finding out just how much of your election was actually really a voters decision). Bank secrecy is also a communal decision, and I think both German and the US are mistaken if they think Switzerland is suddenly going to hand over sovereignty, especially after both moral high horses are just a tad limping.
If the US impeaches Bush for starting a war without reason it may stand a chance to recover some respect, at the moment most US people are suffering abroad because of what Washington is STILL doing, most of the US economy is sold off into foreign ownership (apart from JP Morgan which is snapping up bank bargains - advised by one T Blair who just happened to be part of that war effort that has nuked most of the value out of your assets, nice coincidence?). Likewise Germany, they have some serious explaining to do legally, and they have the problem of explaining why their tax burden is twice that of Switzerland. It's also quite cute to try and divert the attention from the fact that Switzerland was oh so handy when they needed to hide loot from the war, but more of that takes place in Austria which - strangely - everyone is ignoring. Interesting, no? Why is Germany (and by proxy the EU) not talking to Luxembourg about the same?
Both REALLY need an external adversary (the war served quite well too) - too many domestic problems and dodgy questions to stick under the carpet..
The Swiss are fairly pragmatic about secrecy, and they understand why privacy and secrecy is important. No American cowboy can just walk in, lay his boots on the desk and demand details, even with a gun. That may have worked in 1984-compatible UK, it ain't gonna happen in Switzerland. If there is a valid case to be made for investigation, the Swiss will be only too happy to help and have done so for years (your details are not private to criminal investigators, and so it should be). If it's just a general grab for personal details the Swiss will rightfully give both US and Germany a well deserved "up yours".
Here's a fun exercise. Find out where Bush earns his millions, and, more importantly, why they're not kept on American shores. Tell me what the top at JP Morgan earns and where they keep it. Explain to me why the Bahamas, Cayman Islands and Panama are left alone.
Maybe you should use your own head a bit more instead of listening to the press.
In reality, the Swiss bank secrecy is neutral, pretty much like the rest of the country.
Yes, this can be abused to evade taxes. It can also be used to evade your fortune being confiscated by some tyrant which suppresses you. A lot of the arguments against Swiss banks we hear these days were already brought up by the Nazis. There was a reason why so many Jewish families were hiding their money in Switzerland.
In several areas, Swiss legislation is much more strict for example when it comes to preventing money laundry. And yes, the Swiss laws force banks to comply in criminal investigation, --- even from abroad when officially requested. Claiming that the Swiss profit from "victims from the rest of the world" sounds corny and is ridiculous.
To me, it looks more like trying to smear competition. We do banking and we are good at.
Disclaimer: I am Swiss and I work for a Swiss bank.
There are estimates that over $400 B of African wealth has been stashed away in Switzerland.
To do some crude calculations let us assume that this money is invested at the growth rate of the country. Swiss GDP grows at 2.85% while the interest rates paid on the deposit is 1.85%. This would indicate that Switzerland makes $400 Million in profit every year just on money from Africa. Thats about the GDP of Pakistan!
Africa is extremely corrupt, but also very poor. The rest of the world should contribute atleast thrice that (think Russia , South America, India and South East Asia)..
So I think you underestimate how much money swiss make by hiding the "corrupt money" and how important it is for the economy
.ACMD setaloiv siht gnidaeR
No, libertarians support separation of people from everyone else.
Just repeating the same lie doesn't really make your case, sunshine. Insurance works very well when offered in a free market, where both parties are able to make their own decisions as to what kind of coverage they're willing to buy or sell, and under what terms. That's how Lloyds of London and other maritime underwriters made it possible to vastly expand shipping in the 1700's. Voluntary pooling of risk is a brilliant idea, one of the best ones since the invention of the joint-stock corporation.
When it comes to health insurance, the fact is that we have had a ridiculously over-regulated insurance market for health care, ever since the middle of the last century, when the federal government first decided to meddle in our financial arrangements for health care.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."