Tax Questions

[NYBob]

Enemies of Swiss banking secrecy have more muscle -
14 minutes ago
By ALEXANDER G. HIGGINS
Associated Press Writer

(AP:GENEVA) Swiss banks have long irked German and French tax collectors. The latest battle is nothing new, except Switzerland's big neighbors now have the backing of even bigger powers _ the United States and China _ in the fight against tax havens.

The Swiss, stung that the Group of 20 summit of rich and developing countries included them on a watchlist of tax havens, are nonetheless confident they can meet the demands of powerful nations and still hang onto their famed banking secrecy more or less intact.

Some analysts are not so sure.

Swiss banks were slower to develop than the big lending institutions in Italy and other European countries, but by the early 1700s a dozen Geneva families had launched themselves into the business and started lending huge sums to the various war efforts of France's Louis XIV.

Some of the money was coming in directly from wealthy French families who had deposited funds in Geneva banks to evade taxes at home. Authorities in Paris caught some, but by far not all.

Although Swiss banking secrecy had been in effect already, it only became law in Switzerland in 1934, during the midst of the Great Depression.

France and Germany were stepping up their espionage to catch tax evaders, and the Swiss passed a law making it a crime punishable by jail and a fine for any bank official to divulge client information.

Historians now discredit the legend that bank secrecy was implemented to protect Jews being persecuted by the Nazis, but a major study found many Holocaust victims nonetheless benefited.

In one case a Credit Suisse employee in Basel gave the Nazi authorities information on 74 clients, who could have faced the death penalty in Germany for depositing assets abroad. The ethnicity and fate of the account holders is unknown, but a Swiss military tribunal in 1943 sentenced the bank employee to life imprisonment for breaking customer confidentiality.

Now Germany and France, as well as the United States, are hot on Switzerland's case again as part of their effort to shut down tax evasion. With the support of the other G-20 countries, they had lists drawn up of tax havens and threatened to impose sanctions unless they received requested information on foreign account holders.

The Swiss and most of the other countries on the "white," "gray" and "black" lists _ ranging from cooperative to uncooperative _ had already started moving toward compliance with the G-20 demands, which had been well-signaled in advance.

French President Nicolas Sarkozy said when the lists were announced, "I say to my Swiss friends: it's not up to me to make the classifications. Switzerland, you are on the gray list because you have announced an intention and if you keep to it you will rise to the white list and if you don't, you'll move to the black list."

Swiss President Hans-Rudolf Merz said Friday that negotiations on the treaties needed to implement the change could begin next week. The United States and Japan are expected to be first.

"However, it would be impossible" to meet the G-20's target of 12 treaties to be concluded by next November, in part because of the need to submit major treaties to national referendum under Switzerland's cherished direct democracy.

James Nason, spokesman for the Swiss Bankers Association, said Switzerland had already been cooperating with other countries in fighting money laundering and organized crime and it is now a new area _ tax evasion _ that is being added.

"If a country comes along with a well-founded suspicion about an identifiable person and a bank, the Swiss will accept that. What they won't accept is what we've always called 'fishing expeditions,'" such as asking whether a specific individual has an account in Switzerland.

"That's not good enough," said Nason. "Something must have happened. There must be concrete evidence or strong well-founded suspicions of concrete wrongdoing."

"Why on earth should states have the right of forced entry into your bank account just on the off chance of finding a little bit of tax evasion," he said.

Other small European nations with a tradition of banking secrecy were also bridling at being included on the "gray list" of countries that had yet to prove they will comply.

Luxembourg Prime Minister Jean-Claude Juncker told reporters that the four countries _ also including Austria, Belgium and Switzerland _ were angry that despite being members, the Organization of Economic Cooperation and Development that drew up the list "didn't bother to contact" them.

Pascal Gentinetta, director of the Swiss business organization economiesuisse, said the lists were a "power play" of the G-20.

"We learned with the greatest concern and astonishment that the United States and the United Kingdom were not on the lists although their trusts and similar products fail to meet international standards in the fight against money laundering."

China managed to have Hong Kong and Macau put in a footnote rather than anywhere on the list, Gentinetta said.

"Overall, it seems that small countries are punished while big political and economic powers like the United States remain untouchable," said Nicolas Michellod, a senior analyst at Celent, referring to some U.S. states such as Delaware which can be considered to be tax havens. "In time of crisis, the law of the strongest prevails."

Michellod said he expects major changes won't be seen for one or two year, but that "I would expect real change to occur in 3-5 years" after the treaty changes take effect.

"Swiss banks are recognized as having very good service," Michellod said. "It's a moment of truth now. We will have to see whether the great service they provide is enough to put them above the competition.

Daniel J. Mitchell, senior fellow at the free market Cato Institute in Washington, D.C., described the G-20 agreement as "a sad day for freedom."

"Politicians in high-tax nations want to collect more tax revenue, but the campaign of fiscal imperialism against so-called tax havens will not achieve this goal.

"Taxpayers always figure out ways of dodging confiscatory tax rates."

____

Associated Press Writers Frank Jordans in Geneva and Balz Bruppacher in Bern, and AP Business Writer Aoife White in Prague, Czech Republic, contributed to this report.
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this sounds interesting. maybe put drug lords in their place finally.
by mick thanks.
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Audit the Fed bills in the Senate: Contact your senators!
Posted April 3rd, 2009 by BmoreBrawler

http://www.dailypaul.com/node/88601

S.604

Title: A bill to amend title 31, United States Code, to reform
the manner in which the Board of Governors of the Federal
Reserve System is audited by the Comptroller General of
the United States and the manner in which such audits
are reported, and for other purposes.

Sponsor: Sen Sanders, Bernard [VT]

Cosponsors (None)

http://thomas.loc.gov/cgi-bin/bdquery/D?d111:24:./temp/~bdLRHv::|/bss/111search.html|

and

S.513
Title: A bill to require the Board of Governors of the Federal
Reserve System to publish information on financial assistance
provided to various entities, and for other purposes.

Sponsor: Sen Sanders, Bernard [VT]

2 Co-sponsors:

Sen Feingold, Russell D. [WI] - 3/5/2009
Sen Lincoln, Blanche L. [AR] - 3/5/2009

http://thomas.loc.gov/cgi-bin/bdquery/D?d111:23:./temp/~bdLRHv::|/bss/111search.html|

Go Bernie go!
http://www.dailypaul.com/node/88601

"the foxes and the coyotes are arguing about how to fix the hen house"

Fed - elitez pawnz 666bolshevikz us-sr circuz -

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