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Privacy Government The Almighty Buck Politics

Swiss Bank Secrecy Under Renewed Attack 293

Posted by kdawson from the havens-drying-up-like-vernal-ponds-in-global-warming dept.
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."
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Swiss Bank Secrecy Under Renewed Attack More

Swiss Bank Secrecy Under Renewed Attack

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  • Secrecy is fine when it protects individual rights (Score:5, Insightful)

    by stox ( 131684 ) on Sunday March 30, 2008 @03:10AM (#22909978) Homepage
    But downright wrong when it enables someone to evade taxation like the rest of us. Striking a balance will be a difficult task.

    • Re:Secrecy is fine when it protects individual rig (Score:4, Insightful)

      by GalacticLordXenu ( 1195057 ) on Sunday March 30, 2008 @03:27AM (#22910038)
      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?!

      • Re: (Score:3, Informative)

        by Vellmont ( 569020 )

        You can't have it both ways.
        Why not? I don't think the poster said individual privacy rights were inviable. Get a warrant issued by a judge for a valid reason and the government can look at mostly whatever it likes. The only exceptions (I think) are lawyer confidentiality, and doctor/patient confidentiality.

        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 believ

        • Re:Secrecy is fine when it protects individual rig (Score:5, Interesting)

          by Spliffster ( 755587 ) on Sunday March 30, 2008 @05:34AM (#22910348) Homepage Journal
          "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

          • Re:Secrecy is fine when it protects individual rig (Score:5, Insightful)

            by Anonymous Coward on Sunday March 30, 2008 @07:27AM (#22910774)
            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...

            • Re: (Score:3, Insightful)

              by Spliffster ( 755587 )
              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 jo

              • Re: (Score:3, Insightful)

                by watzinaneihm ( 627119 )
                There are estimates that over $400 B [globalpolitician.com] 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 a

            • Re: (Score:2, Informative)

              by pafrusurewa ( 524731 )

              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!

              Okay, that was fun. Let's try actual statistics instead.
              According to the Swiss Bankers Association, "200,000 employees work in the financial sector. That represents 5.3% of the total workforce. Broken down, 3.2% of t

          • Re: (Score:3, Informative)

            by Vellmont ( 569020 )

            Tax evasion is illegal in switzerland by law but the banking secret usually makes it impossible to track it down.
            What I've been told, but don't have a hard source for, is that the Swiss court system will crack-open the privacy for cases where a crime is likely to have occurred (like say you're a Columbian drug lord, or a Terrorist). But it won't crack open the privacy where tax-evasion in a foreign country has occurred. The explanation in this difference (both being a crime in the foreign country) was th

          • Re: (Score:3, Informative)

            by CaptainZapp ( 182233 ) *

            ust not for tax evasion in a foreign country (which I believe isn't illegal in Switzerland)

            As a matter of fact tax evasion is illegal in Switzerland. It is however, as opposed to tax fraud, which is a crime, treated as a misdemeanor. If you are caught to have "forgotten" those 7500 francs income on your tax declaration you will be taxed on those and you pay a fine. It's certainly not legal.

            Switzerland does however (and that's where other countries yell foul, because they don't make this distinction) distinguish between tax evasion ("forgetting" to declare income) and tax fraud (which in any c

      • Oh but you can. (Score:2, Interesting)

        by plasmacutter ( 901737 )
        Wall streeters and corporate types who engage in tax evasion and other financial crimes of this level do their dirty work through corporate subsidiaries.

        Corporations should not be entitled to "human" rights.

        The myth of corporate personhood needs to be firmly put to rest. Either that, or limited liability should end when you have the power to make major unilateral decisions within that firm.
      • I don't think secrecy and fair taxation are generally incompatible. There is no need for the government to know how much money you have, in order to get their share - provided the banks deduct that share and transfer it to the government directly. So the swiss banks would need to add information to the account which states where the account holder is liable to pay tax, and which percentage of the interest that is. They would directly transfer that money where it belongs, and the account holder can use the b

    • Re:Secrecy is fine when it protects individual rig (Score:4, Insightful)

      by rtb61 ( 674572 ) on Sunday March 30, 2008 @03:29AM (#22910052) Homepage
      Even worse when it is not simple tax evasion but the proceeds of crime. Swiss banks profiting based upon the suffering of others, from Despotic leaders, to organised and of course including your typical everyday bribe taking politician.

      The Swiss economy is basically subsidised by victims from the rest of world.

      • There you go, attempting to apply natural law to everything.

        Just because something is unethical or immoral or makes your stomach churn doesn't mean it is illegal where and when it is happening.

      • Even worse when it is not simple tax evasion but the proceeds of crime.
        Everything I've heard and read says this is simply not true. Swiss law allows the courts to crack open the banking privacy when a crime has been committed. I don't think that's any different from most other countries banking laws. What's different is that tax evasion isn't a crime (a misdemeanor) in Switzerland.

        So while you can't really accuse the Swiss of profiting any more off criminals than anyone else, you can, and you'd be entire

    • Re:Secrecy is fine when it protects individual rig (Score:2, Informative)

      by Anonymous Coward

      But downright wrong when it enables someone to evade taxation like the rest of us. Striking a balance will be a difficult task.

      I don't think it will be that difficult to do. Nobody is pressuring Switzerland to give up the privacy of Swiss banks for Swiss citizens. They are pressuring Switzerland to give up the privacy of Swiss banks to foreigners who are evading their national laws. Countries like Germany, France, the United States, and the United Kingdom don't feel that it is a privacy right for you to hide your income and assets from the government to avoid taxation. Switzerland does.

      There is no question this is unethical.

      • Re: (Score:2)

        by Rakishi ( 759894 )
        That assumes you find all the laws of those countries to be ethical. Someone who is, for example, fighting against oppression in their own country may disagree without on that issue.

        Legality and ethics are not equivalent.

        • Re: (Score:3, Interesting)

          by Anonymous Coward
          Do you honestly think Switzerland is implementing these privacy provisions to protect oppressed foreigners? Or do you think that they are doing it for their own profit?

          We have two ethical issues that need to be resolved here. The first is the right to privacy of your income and assets from your government. The second is the motivation of Switzerland's bank privacy provisions.

          In the first case you will need to argue that a person has a right to protect income and assets from their government. In my opini

          • Re: (Score:2)

            by Rakishi ( 759894 )
            I really wonder why people make so many assumptions about posts. I mean is the world that black and white to you, is it impossible to question something unless you rabidly hate it, must everyone hold the party line unwaveringly? I simply said that there is an ethical dilemma thus a trade off involved. I didn't say which side I support, I didn't say which way the tradeoff goes in my opinion but simply that there is one involved.

            I simply think that anytime you lose any privacy such a tradeoff exists and shoul

            • I really wonder why people make so many assumptions about posts.
              Nothing has any meaning without context. My guess is when people provide very short posts, with little to no context and background, the reader is forced to make up a background and context to understand it. Often times the wrong assumptions are made.

              If you'd like to avoid this, try to provide some more information about the general point you're trying to argue and how it fits into the discussion.

              In short, don't assume everyone knows who you

      • Re: (Score:3, Insightful)

        by DavidShor ( 928926 )
        "But they do not have some privacy right to extend this practice unethically to foreigners."

        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

    • Privacy need not include how much money you have in the bank, how much money you earn, how much money you inherit, and/or how much money you spend. Personally, I think all those pieces of information should not just be available to the government, but to the public, by name. An efficient, free market really requires that information to be public anyway.

    • But downright wrong when it enables someone to evade taxation like the rest of us.
      We all.. evade taxation? Not me you insensitive clod! And what is this slashdot-exclusive tax evasion scheme you are talking about - did I miss an important Ask Slashdot or something? I feel very alienated right now. I want to be with you guys.
    • Comment removed based on user account deletion
      • So, if I gun your family down, but then buy an airplane ticket to somewhere, you think the government would have no right to inquire where I went to from the airline, in order to protect the privacy of airline ticket buyers?

        I think you're insane.

  • No worries (Score:5, Funny)

    by Anonymous Coward on Sunday March 30, 2008 @03:12AM (#22909980)
    I've stashed my millions in virtual banks and real estate in Second Life. There's no way that can turn out badly.

  • read the fine print/research the story first (Score:3, Informative)

    by Anonymous Coward on Sunday March 30, 2008 @03:14AM (#22909994)
    It's not so much about the banking laws n Switzerland proper, it's more about Lichtenstein and their completely anonymous foundations. Plus the fact that Lichtenstein (not Switzerland) does not consider tax evasion even a crime, so good luck to get them to tell you anything.

    Worse or better, the scandal is already slowly declining. (Basically it has dropped from the news, or at least the front page of newspapers. E.g. the issue of getting rid of Mr. Beck, the party leader of the SPD seems to be way more interesting currently)

    yacc

  • heh. (Score:4, Funny)

    by apodyopsis ( 1048476 ) on Sunday March 30, 2008 @03:18AM (#22910012)

    All you wealthy Slashdotters better


    heh. you must be new here....
  • I fully support the First Interplanetary Bank of Phobos.
  • Get the regulations in their own nations properly attuned first.

    Especially in the US, where businesses, media outlets, and telecoms have been increasingly 'freed' of regulations necessary for the maintenance of the public good since reagan took office back in the late 80's.

    This includes but is not limited to finances.

    (my first priority would be the media ownership regulations, the removal of which has resulted in the formation of the largest political propaganda machine since hitler's information ministry)
  • Just declare each "tax haven" a terrorist country and get on with it. While you can't just raid enough banks and stock exchanges here in the US without someone noticing, that would come close.

    They may have gotten Spitzer, but Wall Streeters (no, that doesnt include pension/mutual funds) need to know about the rules. When they violate said rules, they should feel something large enough not to pass on, and something they must face directly as those of Main Street face.

    • Re: (Score:2)

      by eean ( 177028 )
      Or you can just essentially make them a part of the European Union with a series of bilateral agreements.

  • Reality mirroring Science Fiction (Score:4, Interesting)

    by TFer_Atvar ( 857303 ) on Sunday March 30, 2008 @03:35AM (#22910068) Homepage
    In "Earth," by David Brin, there's actually a big campaign to uncover all those secret bank accounts, and the whole situation devolves into a war against Switzerland.

    • Re:Reality mirroring Science Fiction (Score:5, Funny)

      by Faylone ( 880739 ) on Sunday March 30, 2008 @03:43AM (#22910096)
      A war against Switzerland?! That's crazy! They can do ANYTHING with just their pocketknives!

      • Re:Reality mirroring Science Fiction (Score:4, Insightful)

        by rve ( 4436 ) on Sunday March 30, 2008 @04:28AM (#22910186)
        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.

        • Re: (Score:2)

          by Sique ( 173459 )
          The last time Switzerland had to fend off a super power they were also considered too small to make it.

          But alas, this is now 531 years ago, when in 1477 they fend of Karl the Brave from Burgund with the largest armored knight army of its time and caused the end of Burgund as a state in the Battle at Murrgarten.

        • Re:Reality mirroring Science Fiction (Score:5, Interesting)

          by Nimey ( 114278 ) on Sunday March 30, 2008 @10:28AM (#22911636) Homepage Journal
          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.

  • Rotary club members seem a tad naieve.. (Score:5, Insightful)

    by Vellmont ( 569020 ) on Sunday March 30, 2008 @03:45AM (#22910100) Homepage
    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.

  • Overblown, Switzerland will do fine (Score:5, Informative)

    by ivec ( 61549 ) on Sunday March 30, 2008 @03:55AM (#22910124) Homepage
    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.]

    • Re: (Score:2, Funny)

      by UnicornRider ( 1107729 )
      From my experience as former junior executive of a Swiss (not: Lichtenstein) bank, things are as simple as that:
      In consequence of an obsession with cleaning, Swiss have to launder everything within reach - including money.

    • Re: (Score:2, Insightful)

      by AnthonF ( 1204808 )
      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.

    • Here are some good reasons why slashdotters would want to put their money into a foreign bank account, even if they can't evade paying capital gains tax in their own country, and even if they can't use their account for money laundering:

      • They want to have added financial security by spreading their money across different banks and countries in case of a crisis
      • The banking system in their own country is too unstable to be trusted with their own savings
      • The country they live in may have an unstable regime a

  • tax burden myths (Score:2, Insightful)

    by timmarhy ( 659436 )
    One myth that people keep repeating is that the wealthy don't pay tax.

    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 [rushlimbaugh.com]

    • Re:tax burden myths (Score:5, Informative)

      by vux984 ( 928602 ) on Sunday March 30, 2008 @05:14AM (#22910296)
      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 [nytimes.com]

      "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.

      • Re: (Score:3, Interesting)

        by PhotoGuy ( 189467 )
        Not to defend inequities in the financial class system in many countries (I'm near the bottom of it, these days) but...

        One reason the rich get a lot of these tax breaks, is that they assume higher risks, and do more entrepreneurial things. Yes, if you got $100M in the bank, it's pretty easy to assume risk on new investments. Nonetheless, the risk is what is being rewarded. If you bought a condo in Mexico (not out of the question for many people who earn a reasonable salary), you too could justify a "busi

        • Re: (Score:2)

          by Rich0 ( 548339 )
          The issue is that having a ton of money in the bank lets you "take risk" while in reality being quite safe.

          For example, I work a standard salaried job. I could probably make quite a bit more if I became self-employed - I'm quite competent and I think I could market my services. However, there would be a substantial risk of periods of non-employment - especially while getting started off. As the sole significant income for my family I can't just neglect my responsibilities and shoot for the moon, so I acc

        • Re:tax burden myths (Score:4, Insightful)

          by Vellmont ( 569020 ) on Sunday March 30, 2008 @11:44AM (#22912216) Homepage

          One reason the rich get a lot of these tax breaks, is that they assume higher risks ...
          Yes, if you got $100M in the bank, it's pretty easy to assume risk on new investments. Nonetheless, the risk is what is being rewarded.

          Uh-Huh. So the risk is really about going from SUPER-DUPER-DUPER rich, to just SUPER-DUPER rich for a few years. Somehow I don't see that as much of a "risk", especially one worth rewarding with lower tax rates.

          If you take a 100% safe job earning a specific salary,

          Where are these 100% safe jobs you're referring too? Because I'll take one of those, thanks. The truth is that economies bust, people get sick, and people screw up. No job is "100% safe". The only thing that's even close to "100% safe" is having 100 million dollars sitting in the bank.

          but you're not assuming much risk either

          Uh-huh. Tell that to the people who've just lost thousands of dollars in equity on their major investment, their home do to the credit crisis. Tell that to the people who've been laid off over the various recessions the country has experienced. If you think being middle class (and to a much larger extent lower class) isn't taking a lot more risks than some guy who's super-rich, then I guess you don't know the true meaning of the word risk.

        • Higher Risk? Not in Socialism for the Rich (Score:4, Insightful)

          by soren100 ( 63191 ) on Monday March 31, 2008 @03:38AM (#22918718)

          One reason the rich get a lot of these tax breaks, is that they assume higher risks, and do more entrepreneurial things.
          "Higher Risks" -- You mean like the massive $200 billion+ in bailouts [cnn.com] the big bankers are getting these days from the Federal Reserve? Surely you can't talk about higher risk with a straight face when average joes are losing their homes yet the big money men are getting our tax money (in one way or another) handed to them on a silver platter when they screw up. These days it seems bigger the screw-up, the bigger the payout / "bailout" from the Fed. That kind of "socialism for the rich" does not entail much risk at all for those who are rich enough to play that game.

          If you have problems with specific tax-writeoffs, lobby your government representatives to change things.
          We have a "pay to play" legislative system. If you can "donate" big bucks to a politician, you get to write the legislation. Or you can hire well-connected lobbyists to get your legislation passed, or you can pay for fancy "fact-finding" trips for your Congressman (to exotic destinations where he can consider all the reasons why he should pass your legislation). How else do you think the rich got lower tax rates in the first place? If you don't have that kind of money to play with, good luck competing against those who do.

      • What seem to want to ignore is that someone who is middle class, or doing well but not a millionaire, has that same lower tax rate for their investments. It's supposed to encourage people to invest their money, instead of sheltering it. Here's a hint: in the 80's, people took their money out of the shelters and invested it because the cap gains tax had been lowered from its previously confiscatory rate. It's hard enough to put your money at risk in an investment. To punish a successful investment is ins

      • Re: (Score:2, Insightful)

        by Sebastian Reichelt ( 1241416 )

        There is a difference between such loopholes, which should be fixed by sane legislation, and the situation with certain countries' banking laws: In this case, we are talking about with a form of tax evasion that is illegal already in the tax evaders' home countries; the problem is that these criminals usually cannot get caught.

        For example, the recent scandal about wealthy Germans evading taxes through anonymous foundations in Liechtenstein was uncovered only because a bank employee stole secret account dat

      • Re: (Score:2)

        by horza ( 87255 )
        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?

        Because 1,460 families are using more of the services such as schools, hospitals, roads, and all the other things that your tax dollars go towards?

        Phillip.

        • Re: (Score:3, Insightful)

          by david_thornley ( 598059 )

          We're talking federal taxes here, and the services you list are paid for heavily by state and local taxes. Federal taxes go to things like defense (and the wealthy have more to defend than the middle class), welfare (which is not normally used by either the wealthy or the middle class), and Social Security (which is funded disproportionately by the poor and middle class - the wealthy often do not work at jobs that require that tax, and if they do it is a trivial part of their income). The Federal court a

      • As much as I love a good inflammatory "the rich don't pay taxes" argument, it's simply not true.

        For example, look at that article you linked to yourself for the claim that 1/436 rich people didn't pay taxes.
        First off, 1/436 hardly sounds like a strong support for your claim that the rich don't pay tax.
        Second, we find from your own article, that "the most important item in eliminating tax" was taking income in the form of tax-exempt interest on state and municipal bonds. Wow, what a loophole! We decided to

    • Re: (Score:2)

      by jafiwam ( 310805 )
      BUAHAhhahaahaaha! (choke) hahahahaah!

      I love it when folks who CANT DO BASIC MATH [blogspot.com]spout stuff like this.

      Retard.

  • Singapore? (Score:3, Informative)

    by Futurepower(R) ( 558542 ) on Sunday March 30, 2008 @04:19AM (#22910168) Homepage
    I read an article that claimed that Singapore was trying to position itself as the new bank secrecy country.

  • worst. summary. ever. (Score:5, Informative)

    by 0WaitState ( 231806 ) on Sunday March 30, 2008 @04:27AM (#22910184)
    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.

  • I don't give a $*&%$ about the Swiss.... (Score:3, Interesting)

    by EdIII ( 1114411 ) * on Sunday March 30, 2008 @04:32AM (#22910202)
    This is not really about the Swiss as much as it is about Privacy and Tax Evasion. The fact it occurs in Switzerland is incidental. If the ability for foreigners to maintain private bank accounts was eliminated in Switzerland tomorrow, it would just move some place else.

    Everybody has always known that Switzerland is used for tax evasion. From the very very beginning, since we started doing income taxes in the US. I am not sure about cultures in other parts of the world, but in the US it became "public knowledge" a long time ago. Just recently I was watching an episode of MASH on TV, which was filmed in the 70's and set in the 50's where Switzerland and Tax Evasion was mentioned. So it is not new, and it is not shocking.

    What I find strange is that anybody is trying to do something about it. I wholeheartedly believe that the political systems in most western countries are irreparably broken and absolutely corrupt. The only logical conclusion is that position of those in power have shifted their ideology and wish to trade the value of secrecy for the value of intelligence (data).

    Privacy takes power away from governments. Tax Evasion does not always require privacy. It certainly helps, but it is not required. So I view this as mostly an attack on Privacy with the "cover" of going after Tax Evasion.

    Taxes are a controversial subject, but I really see it as a choice between 2 systems.

    An active system which grants authority to take away privacy through auditing and information policies and the legal foundation to seize property. This is what we have now. A system that grants a large amount of control to certain people that through a perverted legal authority can destroy lives with a guilty-first, innocence-proven-later approach. Additionally, the value of the data, and the ability to gain said data, is way to attractive to other governmental agencies that wish to use it as leverage or in some other "intelligence" related manner. What I have always found so despicable about this approach is that once you "kill" somebody and realize it was a mistake later, you cannot raise them from the dead. Also, a dead person cannot defend himself. Many Americans have been destroyed by the IRS only to prove themselves correct later. This was of course after all their property was confiscated and sold. I am not saying there are true tax evaders, but for every 10 of those I would speculate at least 1 person is truly innocent.

    The other system would be a passive system. One in which Privacy can co-exist harmoniously. Instead of taxing personal income, just tax purchases. A consumption tax, which is not unheard of in the US, and did in fact exist in its past. There are alternatives to a consumption tax and the basic idea is to not tax income, but to tax expenses. The government would have no business in the private financial affairs of its citizens anymore. Banking data would become intensly private, as it should be. Why care if somebody has 100 million dollars in the bank? The moment they try to live their lives in a higher standard of living than the average person, they must start paying higher than average taxes. The taxes on those private jets and the gasoline alone would represent the yearly taxes for whole neighborhoods and communities of people. What happens when they die? They leave 100% of it to their children with none of going to the state in the form of death taxes. Same situation all over again. The kids would have to pay taxes on any "big ticket" items they purchase as well. Flat taxes, consumption taxes, etc. WORK. They just don't work for the real interests of the government.

    In any case, the tax environment in the US and many countries was setup from the very beginning to favor the tax evader. It was meant to tax the poor and the middle class while providing methods for the rich and the elite to hide their wealth.

    If you think I am too cynical... pick up any copy of "Millionaire" or "Billionaire" magazine or any similar publication and look at the full page advertisements for "Asset Protection", "Tax Deferment", or "Zero Tax Liability".
     

    • Re:I don't give a $*&%$ about the Swiss.... (Score:4, Insightful)

      by AuMatar ( 183847 ) on Sunday March 30, 2008 @05:49AM (#22910384)
      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.

      • Re: (Score:2, Insightful)

        by cfulmer ( 3166 )
        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, includ

    • Re: (Score:2, Informative)

      by nospam007 ( 722110 )
      This is not really about the Swiss as much as it is about Privacy and Tax Evasion.

      Exactly! Even SWIFT announced that they will setup a data centre in Switzerland to make sure that European and Asian messages stay outside the control of USA.
      http://www.swift.com/index.cfm?item_id=63570 [swift.com]

  • Britain turned down the chance to recoup £100m (133m) in unpaid taxes from UK residents with bank accounts in Liechtenstein at least two years ago because revenue officials refused to pay a whistleblower a tiny fraction of that sum. The informant turned instead to Germany's secret service, selling a list of at least 750 wealthy Germans with money stashed away in Liechtenstein. This has sparked Berlin's biggest crackdown on tax evaders and triggered a diplomatic row with the principality. . . Read mor
  • The problem is money creation itself, of the very nature of banking.

     

    • Right. All of the evils in the world will be alleviated if we simply do away with currency and operate as a barter economy.

      Don't you get it? People aren't greedy for money, they're greedy for the material possessions they can acquire with money, and getting rid of money won't get rid of that greed. You'll have the same problems you had before, along with some new ones, because you acted like an idiot and dismantled the system that allows us to specialize. You know, so some of us can have jobs besides just

  • While they are out extracting taxes from the rich: it is about time that they tax those in the black (cash) economy who don't pay tax at all.

  • I have a lot of trouble believing that this has anything to do with banking secrecy, money laundering, tax evasion or any other such ill.

    I remember in the 1990s when the US government attacked the secrecy of the Swiss banks, because they had accounts containing stolen goods from the Holocaust. The point of the exercise was to put political pressure on the Swiss to be better citizens in the global economy and therefore international community. However, all of this was a political smokescreen intended to re

  • Secrecy Laws (Score:2, Interesting)

    by Ludwixx ( 1070766 )
    I believe the Swiss bank secrecy laws were passed in 1934 in response to Nazi efforts to confiscate Jewish assets. Of course, situations morph over time. Ludwixx
  • Disclaimer: I live and work in Switzerland.

    What blows me away is that it seems as if the US , currently in a recession, and the EU (but especially Germany, with mind boggling high taxes) are looknig for someone to lay the blame on for their own problems again. Yawn.

    It's a lovely day, I think I'll go outside and wait for kdawson to find some other flaimbait article.

    • the US , currently in a recession,
      Heh. That's certainly what the media keeps talking about. The fact is nobody really knows if the US is currently in a recession. You can prognosticate and speculate all you like, but it won't change the fact that nobody knows.


      and the EU (but especially Germany, with mind boggling high taxes) are looknig for someone to lay the blame on for their own problems again. Yawn.
      Oh please. Switzerland has been allowing people to hide assets from tax authorities for a LONG time.

  • Switzerland: A Direct Democracy (Score:5, Insightful)

    by LKM ( 227954 ) on Sunday March 30, 2008 @11:01AM (#22911882)
    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.

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