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. "
I've stashed my millions in virtual banks and real estate in Second Life. There's no way that can turn out badly.
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?!
A war against Switzerland?! That's crazy! They can do ANYTHING with just their pocketknives!
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
Yes, Switzerland has a long tradition of bank secrecy. Here it is considered a natural part of one's right for privacy.
But among the many tax havens (http://en.wikipedia.org/wiki/Tax_haven#Examples), Switzerland is among the best world-citizens: while it still offers secrecy, it has had for several years agreements with the US and the European Community to tax capital income from foreign citizens. The principle is: we preserve secrecy, but we will tax the funds for you.
For money laundering too, Switzerland offers one of the highest levels of scrutiny from the countries above.
Given the number of alternatives, it is not in the interest of the international community to shut down Switzerland.
In Europe alone, Luxembourg, Austria and Malta offer similar levels of secrecy. And it is not in Europe's interest to shut its internal secret- and law-abiding banks.
So the whole story is overblown. Is it just anti-marketing against Swiss banking?
This said, the current affair relates to Lichtenstein - an independent state attached to Switzerland like Monaco is attached to France. Like Monaco, this "small rock" of a state is known to have more lax practices. It would not hurt to take some balancing action there.
[Disclaimer: I'm a Swiss citizen, but have no vested interest in any Swiss bank - I'm a worker/small entrepreneur in the medical/software industry, not a capitalist nor an investor (I do not even play on the stock market). But like many citizens here, I see bank secrecy as just another facet of privacy, which is not incompatible with fair taxation and a fair social system.]
Between the rambles, the cliches, the sudden topic changes, somewhat fractured grammar, the dubious attempts to apply American political stereotypes to Switzerland, this has got to be the worst summary I've ever seen on slashdot. Even Michael or Zonk on (hypothetically) quaaludes could have done better.
Remain calm! All is well!
One myth that people keep repeating is that the wealthy don't pay tax.
And it would be a myth if it weren't true...
http://www.nytimes.com/2005/07/03/business/03tax.html?_r=1&oref=slogin
"About one in every 436 high-income Americans paid no taxes in 2002, up from one in 531 in 2001 and one in 1,010 in 2000."
the fact is this is total bullshit, the top 1% in america pay almost 50% of the tax
Actually, its the two 2% paying 53% (which is also in the cite I provided). But close enough.
The trouble however, is that a middle class american pays 30-35% in taxes, while a high-income american pays, on average only 18%.
So sure, if you make 146M bucks, yeah, your paying $26M in taxes. But if you take 1460 families that each make $100,000, that's the same 146 million in aggregate, but they each pay ~33k in taxes on average,... or 48M in aggregate.
Why do they pay 48M when you only pay 26M?
The high-income earners have considerable income from 'investments' not just 'wage/salary' which is taxed differently and wage income has far fewer loopholes and options than investment income, and there are countless more ways to leverage your money too the more you've got to shuffle around to maximize tax savings.
They're more likely to be 'self employed' at least with respect to some investment or other and suddenly that trip to the bahamas is a tax deductible 'annual meeting' instead of a 'vacation', and the twice yearly jaunts to Mexico? Tax deductable trips to inspect their investment rental properties....
Their car? Tax deductible lease payments, maintenance, and fuel... Their mortgage? Bah, who are we kidding they don't have a mortgage, but they do have a HELOC to buy even more investments, and the interest on the HELOC? Because its being used to buy goverment approved investments...you guessed it... tax deductible. The tax savings more than offset the interest, meanwhile the investments themselves can make money too.
The wealthy pay more taxes than the middle in total, but its the ones in the middle who see the largest chunk of each dollar bitten off by the IRS never to be seen again.
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.
"The only difference here is that Switzerland seems to have a banker/client confidentiality, which seems a bit strange to the rest of us to throw it in with doctors and lawyers. Even that may I believe is cracked open for criminal cases, just not for tax evasion in a foreign country (which I believe isn't illegal in Switzerland)."
I am swiss. Tax evasion is illegal in switzerland by law but the banking secret usually makes it impossible to track it down. Most swiss people have not much of a benefit about this banking secret. It's the foreigners with shitloads of money which profit (we won't see tax for their illegally stored money neither) but we get into loads of troubles in foreign affairs (politics).
It's still not understandable to me why a country has to protect a private industry by law to make breaking the law possible. the only ones which benefit from this are the banks. The ones which loose because of it are the people.
About damn time to get rid of this law.
kind regards,
-S
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...
Because the Swiss militia is small, they strongly emphasize individual marksmanship. In pursuit of this, their rifles are made to a high standard & are quite accurate. I've got a 1936-vintage K31 which, if I had a proper shooting rest, could get minute-of-arc accuracy with ordinary 7.5mm ammunition and the issue open sights. Most Swiss who still use this old bolt-action rifle have replaced those sights with peeps or a scope, which are inherently more precise.
The K31 is a couple generations old, but I don't imagine they've gotten worse since then.
Hail Eris, full of mischief...
E pluribus sanguinem
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.