Swiss Banks Making Concessions On Secrecy

Aryabhata writes in with news that should chill the hearts of evil dictators and tax cheats everywhere: one of the last bastions of strong banking secrecy, Switzerland, is bowing to international pressure and agreeing to cooperate with some foreign investigations of wrongdoing. "...the Swiss government announced on Friday that it would cooperate in international tax investigations, breaking with its long-standing tradition of protecting wealthy foreigners accused of hiding billions of dollars. Austria and Luxembourg also said they would help. ... The famed 'numbered accounts' that do not bear the owner's name will still be available for clients willing to pay for added anonymity. ... Over the past month, leaders have made similar promises in Singapore, Liechtenstein, Bermuda, the British islands of Jersey and Guernsey, and tiny Andorra... other 'offshore' banking centers are still available in the Caribbean, Panama, Dubai and elsewhere."

Comments

and who ISN'T going to pay up?

[v1]

The famed 'numbered accounts' that do not bear the owner's name will still be available for clients willing to pay for added anonymity

Anyone that needs one of those accounts is going to be willing to pay that added fee. So besides the Swiss making a little more money off their money hiding, what changes?

Re:and who ISN'T going to pay up?

[garett_spencley]

Or anyone who, out of principle, doesn't like the idea of having authorities snooping on their economic lives at their will.

Honestly, "Aryabhata writes in with news that should chill the hearts of evil dictators and tax cheats everywhere" comes across as a little ironic to me, when considering that the mere concept of enabling authorities to snoop on the financial lives of people at it's will is right up the alley of dictatorial and authoritarian. What ever happened to freedom, the right to privacy, search warrants, due process and innocent until proven guilty ?

Re:and who ISN'T going to pay up?

[dbcad7]

And yet.. if you were trying to find out where 60 some odd billion dollars that some guy stole from peoples retirement accounts has gone to.. the high road just doesn't sound all that righteous..

Re:and who ISN'T going to pay up?

[Patch86]

All the Swiss (and other governments) are planning on doing is co-operating with criminal investigations, which until now they've refused to do. You'll still need warrants, court orders and all the other trappings of due process before they'll co-operate.

Like it or not, if you live/work in a country, you need to pay taxes there. And if you steal money in a country, you need to give it back. Anything that allows people to dodge taxes and profit from crimes is a bad thing, full stop.

Re:and who ISN'T going to pay up?

[garett_spencley]

First off, I didn't realize that the banks were not honoring search warrants. My bad, I should have RTFA'd and I appreciate people informing me and not flaming me. Now I know better.

However, what you are describing is mob-mentality and is what leads us down the road to an authoritarian and totalitarian system. I fear that Bernie Madoff is going to be used by the authority to increase it's grip over people's lives just as they do every other "catastrophe". We need to keep things in perspective. We have due process for a reason: to preserve the individual's freedom. People who screw with the system and disrupt the social order do need to be dealt with, but if we do not limit the authority's power then we all lose, rather than gain.

This is the exact same attitude that lead to blatant violations of civil rights after 9/11. People were saying "And yet ... when people get into planes and fly them into buildings killing thousands of innocent people ... the high road just doesn't sound all that righteous".

I would rather let a few bad guys get away, and make the ones that we catch compensate society for their loss (by paying back what they stole, not by taking away their freedom ... unless we're talking about violent offenders of course) than give big brother the ability, potential and incentive to control us.

Re:and who ISN'T going to pay up?

[plnix0]

Remember, any dictator can create "legal" search warrants. Not all "legal" search warrants are moral or ethical.

Re:and who ISN'T going to pay up?

[meburke]

Good idea. It's called "reparative justice". And how about if you are NOT convicted, the prosecuting government has to reimburse you for all YOUR expenses incurred in defending yourself?

Hardly a suprise

[geniice]

Hardly a suprise. Tax havens can be overlooked when times are good. Less so now. If the situation of somalia continues I can see some reform of the ship flagging system also takeing place.

Stop the Presses...

[retech]

Evil Dictators got caught doing wrong... (stop).

Last bastion of free money compromised... (stop).

Secret stash not so secret... (stop).

Mugsy and Lefty may be on the take... (stop).

Slashdot editor KDawson sensationalizes yet another tired story... (stop).

Re:Stop the Presses...

[hamisht]

Evil Dictators got caught doing wrong... (stop). Last bastion of free money compromised... (stop). Secret stash not so secret... (stop). Mugsy and Lefty may be on the take... (stop). Slashdot editor KDawson sensationalizes yet another tired story... (stop).

KDawson please just... (stop)

Tax Cheats?

[anagama]

Like cheating an inept and corrupt government is wrong somehow.

Re:Tax Cheats?

[T Murphy]

Like cheating an inept and corrupt government is wrong somehow.

If you consider that true, then considering how a perfect government is never going to happen, that would imply taxes should never be paid.
So much for civilization.

Re:Tax Cheats?

[SwedishPenguin]

I guess you can do without public roads, you'll just build your own?
If you get permanently disabled somehow and can no longer work for a living, I assume you'll have enough savings to last a lifetime?
You can also pay for your kids school? Health care?
I assume you'll extinguish any fires, or at least have several thousand at hand when it happens to pay off the local firefighting company?
And you'll catch criminals on your own, or maybe you'll pay the private cops thousands to catch that criminal that stole a computer worth $500?
Oh and can I assume that don't care one bit what happens to those who cannot pay for all this on their own (ie. at least 50% of the population)?

Re:Tax Cheats?

[Anonymous Coward]

"Survival of the fittest" often means the most violent, least caring people will win. So you're happy with a society run by thugs and psychos for their own benefit?

Re:Tax Cheats?

[ardor]

Unlike animals, we are not necessarily bound to our instincts. We do not have to slavishly follow the "survival of the fittest" path. A "survival of the fittest" society is a dystopia.

Re:Tax Cheats?

[Totenglocke]

Very good points. Too bad most people are so brainwashed into thinking we need the government controlling everything and will call your post "anarchist propaganda" or something along those lines. The fact remains, most of the time the government causes more harm than good.

Re:Tax Cheats?

[theillien]

While I don't disagree with your assessment of what it was like back then, I would argue that we call them the Dark Ages more because of the stifling nature of the Church which prevented any significant and beneficial progress.

Re:Tax Cheats?

[T Murphy]

People will pay for civilization out of good will? Pretty big assumption if you ask me. (As another post points out, paying only for what you need is like not buying insurance- I'm willing to pay a hefty premium if it gets me civilization).

Re:Tax Cheats?

[SerpentMage]

Dude what have you been smoking?

First let's tackle health care shall we...

Health care in private does not work because it is upside down economics. It is not like getting car insurance because for the most part you can avoid getting into an accident. BUT when you get old you cannot avoid cancer or a whole host of diseases that will afflict you.

This means when you are young you should actually pay more in insurance so that you are covered for the future. But health insurance is priced like car insurance and thus as you get sick you end up paying more. It is wrong!

When Ron Paul and such talk they talk CRAP, yes you read that right CRAP. They talk about breaking a leg, giving birth, etc. They are not talking about chronic diseases, which are actually the core of our health care dilemna. We have people who should have kissed their lives goodbye still living. And that COSTS A WHOLE HEAPING LOAD OF MONEY!

So if you are going to talk private I say make youngsters pay more when they are healthy than when they are old.

Oh yeah that will not work since we tend to be people who only react when they are having problems.

Let me give you a secret, do some research on Bismarck the state leader. He introduced concept of health care, and pensions. He did so to pacify the people. But he did so with a very high bar because he knew that health care and pensions can suck a government dry.

The true cost of health care, pensions and society can only be borne by the populace as a whole. Do the math and you will see there is no other solution.

Well there is a solution, those that have the money get it, those that don't die...

Re:Tax Cheats?

[shutdown -p now]

Brace yourself, you're in for a real shocker. The USA did not have an income tax prior to 1913 ! *gasp*

Correction: the USA did not have a Federal income tax prior to 1913.

The only role I see for government in a free society is preserving freedom. The courts and the police do need to exist in order to deal with those members who would inflict harm upon others, and to act as an arbitrator, when requested, to settle contract disputes. Everything else, you do not need a government to private... and you do not need an income tax to pay for the judiciary.

There had been no society in the history of the world that worked as you describe. To me, it is a strong indicator that this is nothing but utopia - not any more real than communism.

I won't even bother dealing with the rest of your arguments, save for this: there are many other countries in the world, and quite a few with standard of living higher than in US. All the latter ones also have more government intervention into economy, and higher welfare. In fact, in general, it's the countries with the higher welfare spending (and taxes, of course) that tend to have least poverty, best healthcare and education, and so on (Scandinavia, for example). This clearly shows that the model works, and any problems you might have in the U.S. with "inefficient and bloated government" are your own local problems, and not inherent in the idea of strong government in and of itself. Maybe, if you stop chasing the utopia of Libertarianism, and instead work on fixing your own government so that, when its intervention is needed, it's not "inefficient and bloated", you'd get a lot more bang for the buck.

Re:Tax Cheats?

[garett_spencley]

"My problem with the whole Von Mises set and philosophy is that if you take the arguments seriously and push them to their logical conclusions, they not only suggest that it's better to refrain from taking wealth away from the wealthiest, it's actually better to funnel it towards them in a massively regressive way. The arguments all go towards supporting the view that the incremental utility to society is always higher when a dollar goes into a wealthy person's hand than a poor person's since the wealthy one is more likely to increase production through the use of that dollar than the poor person is (the poor person will merely use the dollar to increase consumption). "

I urge you to read "Human Action" if you really want to understand the subject, because clearly you don't.

In the truly free market people are simply left to their own free will to decide who to exchange with. It all starts at the beginning. As individuals we need certain things to provide for our survival and comfort. If we work together we produce more of these things. The idea is that through voluntary mutually beneficial exchange we can all get what we want and need. It's important to note the differences between that and socialism. According to Mises the key paradox behind socialism and communism is that in such a system it becomes impossible to determine what the people need, want and how much of it due to the lack of monetary prices. Monetary prices are the only invention that humans have ever come up with to measure subjective value.

So you actually have it backwards, free market does not reward the wealthy. It creates wealthy people by rewarding those who most effectively provide for the needs and wants of the people. A person can only become wealthy if he produces something that satisfies others. The moment he ceases to do so he stops being rewarded by his peers and he stands to lose all of his wealth if he does not invest it in something that will increase the standard of life of his peers.

According to the Austrian school of thought, the reason the markets are creating so much poverty while at the same time making the rich richer at present is because governments, via regulations and monetary control, are giving hand-outs to the wealthy and ensuring that they stay wealthy at the expense of everyone else.

Re:Tax Cheats?

[Totenglocke]

Actually, times when the economy is bad (in the US at least) is when charity goes up. Why? Because people say "Well, I can still survive if I give away $500 and John and his wife both lost their jobs, so I'll give them $500 to help out". So much for your delusion of "American greed". You thinking that you should benefit from someone else's hard work, that's the real greed.

Re:Tax Cheats?

[QuoteMstr]

Sure: I'll decrease my standard of living, but I'll let you have the honor of going first.

Secretary of Treasury

[onefriedrice]

Aryabhata writes in with news that should chill the hearts of... tax cheats everywhere..

Well, if cheating on taxes becomes less profitable, they may have a bright future in politics.
I know someone who can get them high positions in the US government...

Re:Can the banks be trusted?

[seanadams.com]

How does a person get their money out of these numbered accounts? What recourse does a person have if the bank refuses to hand over their money?

It's called trust. The Swiss banking system has earned it over the course of more than three hundred years. Honestly, where do you think your dough is safer: a numbered Swiss account, or an American account with your name on it?

Not everyone who has accounts in a different country is doing so to cheat on taxes. If you're really loaded it would stupid not to spread the risk across multiple countries/banks, to minimize your exposure to precisely the kind of clusterfuck that's happening now.

Re:Facts & fiction

[piquadratCH]

The Swiss had an ignominious history in WWII. They looked out for their own financial interests at the expense of all others.

Won't this ever stop? Yes, there where some assholes that made a profit out of the desperate situation of wealthy Jews, yes, in hindsight, the Swiss government didn't criticize Nazi Germany as much as it should have. But, as always, you have to consider the context. As of 1940, Switzerland was completely surrounded by the Nazis. The Swiss government walked a tightrope between doing the morally right thing and securing its own survival. Calling Switzerland a profiteer of WWII is, quite simply, historically wrong.

Besides, Switzerland formed an independant comission to illuminate its role in the war. I'm not aware that any other country did something comparable to look at its past failings.

swiss american tax treaty

[reusr1]

Like it or not, there is a tax treaty between Switzerland and America ( www.irs.gov/pub/irs-trty/swiss.pdf ). It clearly defines in what cases the USA or Switzerland can get information from each other regarding taxes and it deals with double taxation. The agreement is between the two countries, so if the USA doesn't like it, why did it agree to it in the first place and why are we not discussing renegotiation of the agreement?