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Taking aim at tax havens
U.S. government to get names of suspected American tax dodgers using Swiss bank accounts
Monday, Aug. 24, 2009 | 2:07 a.m.
The Obama administration, in a departure from previous administrations, has been aggressive in going after Americans hiding their wealth in secret offshore accounts so they can avoid paying U.S. taxes.
This new approach is welcome and is paying dividends: On Wednesday the Justice Department and the Internal Revenue Service announced they had struck a deal with Switzerland’s government. Switzerland is expected to turn over the names of suspected American tax dodgers who hold 4,450 secret accounts with UBS, one of the world’s largest banks.
The agreement ends a standoff between the U.S. and Switzerland, whose banking secrecy laws have thwarted the U.S. from going after tax dodgers there.
Originally, the U.S. had been trying to get UBS to release the names of those holding 52,000 UBS accounts; it was believed their accounts amounted to $18 billion. In turn, the Swiss government claimed that turning over such information would violate its sovereignty. But this wasn’t about lofty claims of “sovereignty.” The reality was that if Swiss banks were forced to hand over everything, tax cheats would withdraw their money en masse from Swiss banks, a pillar of that country’s economy.
The U.S. government isn’t getting as much information as it initially wanted, which enables the Swiss government to save face, but it is a breakthrough nonetheless.
There are reports that those holding accounts with UBS are withdrawing their money and taking advantage of a leniency program that the IRS set up, allowing those with offshore accounts to come forward to the IRS in exchange for lessened penalties.
It’s also significant that IRS Commissioner Douglas Shulman said the Swiss government is working with the IRS on requests for disclosing the names of those holding accounts at other banks where tax cheating is suspected.
It’s about time.
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What about foreign tax cheats using NV and DE tax havens?
More American Hypocrisy.
Taxation is theft.
jackov -- you call them "tax cheats." As if all government has to do is make a demand and it is entitled to automatic respect. I say the government owes us far more than it gives.
jb101 -- right on! But it's more like "taxation is predation."
My conclusions about government:
1- Government at every level has changed from parasite to predator upon the citizens it was created to benefit and serve. It is actively on the hunt to engage us where it once left us alone.
2- No matter what it says, like "for your safety" and "it's for the kids," it's about getting the money.
3- Unless you're ready and willing to hurt them, give in.
Our tax system is beyond repair and needs to be replaced. It costs over $10 BILLION a year to fund the IRS, America's answer to the gestapo. In our country's infancy, the government was funded strictly from excise taxes and the politicians were part timers who received a small stipend for their services. Now we have full time representatives who are paid handsomely and receive the best health care and retirement benefits. All of this paid for by INCOME taxes. There are many who argue the tax code isn't meant to tax income. They will lose that argument. To fund our country at the current rate of revenue from income taxes we need to get rid of the income tax, rescind the 16th amendment, shut down the IRS and institute a national sales tax. Such a plan is currently in the House and Senate. It is the FairTax. The FairTax eliminates ALL federal taxes with the exception of some excise taxes. The FairTax is a 23% tax on ALL NEW goods and services. There are no exceptions. However, to insure that no one pays tax on necessities the FairTax provides a monthly "prebate" to all registered households. The amount is based on the poverty level and number of persons in the household. The FairTax would tax everyone fairly. Those in the underground economy and those profiting from illegal activities would pay the tax every time they make a purchase. Illegal immigrants would pay and tourists visiting our country would pay. Sadly, for politicians, the FairTax would not be the political football our present system has become, benefiting the K street lobbyists and their minions. Persons who find it advantageous to "hide" their wealth in foreign banks would no longer need to do so. It is estimated that hundreds of BILLIONS of dollars would be repatriated if we would implement the FairTax and eliminate the income tax. Companies would flock to our country since there would be no income tax or business tax to pay. Employment would soar as would our economy. It is not a pipe dream and with enough public support can easily become a reality.
This will backfire as nations retaliate. America happens to be the world's biggest and best tax haven. Nevada, being one of the best states to invest.
Grumpy
A national sales tax would be the most REGRESSIVE form of taxation imaginable, especially at 23%. It would impact lower and middle-class families harder than anyone else, and would essentially devestate them financially even with exemptions for "necessaries".
The Fair Tax is stupid. It is DEAD. Let it go already.
Doug, the Fair Tax has a prebate installed. Each month 23% of the value of the monthly income of the poverty rate is rebated back to you into a bank account.
This is available for every person.
Essentially it covers the taxes a person would owe up to all purchases possible for someone at the poverty level (ex: $10,000 = poverty level for a single person the prebate would provide you with a monthly check that would cover the sales taxes owed whether or not you spent the $10,000
People spending at the poverty level in America would then pay 0% in taxes while they rich would pay 99.999999999% of the 23% tax max. That is a progressive tax.
Furthermore it eliminates the highly regressive payroll tax so its actually more progressive than what we have today.
"Each month 23% of the value of the monthly income of the poverty rate is rebated back to you into a bank account."
That's the plan in theory. Now tell me if that would ever have a hope of getting through any Congress exactly as it's written.
Murphy's law, remember?
So its regressive because its progressive though on the off chance some congressman might remove the prebate in amendment?
No, it's regressive because even with the prebate it disproportionaly affects lower and middle class families.
For one thing, a tax-inclusive Fair Tax would be an in effect 30% tax rate, not 23% as proponents of the tax claim.
Second, unless gasoline is exempted everyone would be paying an additional $1 per gallon at the pump in taxes under this scheme.
Third, and this is most important, to enact the prebate someone else would have to pay more. The U.S. Treasury Department did an analysis on the fair tax and stated that while those under $15,000 a year would see an even deeper decrease thanks to this plan...anyone making between $30,000 and $250,000 (which is something like 2/3 of the country) would be paying MORE than they're paying now, and everyone over $250,000 would be paying substantially LESS in taxes than they are now.
Doesn't sound progressive to me...
DouglasDemocrat-It's about time the "poor" start paying their "fair share". They live here, they use more government services than any one else. Let the lazy bums contribute. I'm tired of supporting freeloaders.
http://reason.tv/roughcut/show/eight-rea...
8 reasons why government spending hurts the economy.
"It's about time the "poor" start paying their "fair share"."
And here we go again, folks...
Didn't Bill Clinton pardon a tax cheat, Marc Rich? Funny, the Sun editors didn't seem to have a problem with that.
The Obama administration is going after those who avoid paying their federal income taxes. Best way to start - call a meeting with all the cabinet heads.
Is former U.S. Senator Phil Gramm still Vice Chairman of the Investment Bank division of UBS?
See:
http://notionscapital.wordpress.com/2008...
Patrick is this plan supported by any of the fortune 500 company heads or investment banking fund managers? If it is why would they support anything that would not benefit their tax situation which means it shifts to another set of payers.