Swiss Bank Secrecy Model Under Threat – But the Problem may be our own Complicated Tax Code
US insistence that the Swiss bank UBS handover client data to the US government authorities is having a ripple effect in the Swiss political and banking circles. For decades, the Swiss banks have maintained secrecy of client information and as a result has attracted many high net worth clients. Swiss laws do allow the banks to divulge data in cases of tax fraud or criminal investigations, the problem is that tax evasion or as they say, forgetting to declare assets, is not considered a crime under Swiss law. Swiss worry that their core model of banking is under threat if they are not able to protect UBS. For UBS this is a conundrum as they do more business in US than they do elsewhere in the world.
I have difficulty understanding why Swiss do not consider tax evasion as a form of tax fraud. Be that as it may, it may also be worthwhile for the US authorities to consider what drives this form of tax evasion by its citizens. As reported in the media, IRS loses out on approximately $100 B in tax revenues due to unreported assets hiding in Swiss banks. This is a lot of money. Could it be that we need to take a closer look at our tax policies and simplify the tax code so that this type of tax evasion is no longer attractive or possible? May be it is time to consider some form of flat tax or fair tax or national sales tax system which is much more equitable and has less loopholes and reasons to evade paying taxes.
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finally an intelligent blog.
everyone should pay a fair share
The US brags about being competitive. But not in the banking arena.. We sue the competition if they get more business than we do. We should learn from the Swiss. and we should not meddle in another country.
If the Swiss citizens put money in US banks, i don’t think the Swiss would sue the US to give up their names. They would try to get those people back by offering incentives. The US government being run by all trial lawyers do what they do best ….SUE.
@bowater, Thanks for your comment! I have always found that there will not be a supply if there is no demand and if the demand for these services originates from our country (and the supply is overseas), the easiest thing to do is to fix it so the demand is no longer there.
Arohan’s last blog post..All hope is lost now – I am busy looking at cheap stocks to buy