Thursday, June 17, 2010

Swiss Legislators Sell American Tax Evaders Down the River to Bailout Big Bank

Swiss legislators have destroyed decades of tradition for the benefit of a sloppy Swiss-based big bank.

The legislators have approved a law that clears the way for the government to hand over the names of thousands of alleged U.S. tax evaders to the Internal Revenue Service, dodging the risk that the U.S. would reopen a bruising tax case against Swiss bank UBS AG, according to WSJ.

With the passage of the law, Swiss tax officials, who had suspended processing the 4,450 names, are ready to hand over data on 1,200 accounts, according to a government spokeswoman. So far, the Swiss have sent 500 names of clients who consented to the immediate transfer of their details to the IRS.

What's really going on here is that UBS, with its huge presence in the U.S., was extremely vulnerable to U.S. fines and asset seizures if they didn't play ball with the IRS.

The big bank thus agreed to protect its own hide and agreed to turn names over to the IRS and lobbied the Swiss legislature to change the law and allow the names to be turned over. Naturally, the Swiss legislature rolled over for UBS. Bottom Line: Big bank survives, some U.S account holders, however, headed to jail.

More than 30 years  ago, Harry Browne in his book about Swiss Banks pointed out that Swiss banks with large assets in the U.S. were vulnerable to such U.S. pressure. He always recommended dealing with Swiss banks that had no presence in the U.S.

23 comments:

  1. So much for the Swiss banks. They have now officially screwed themselves royally and no one in their right mind is likely to open a Swiss bank account from here on out.

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  2. You mean, "no international criminal Robber Baron in their right mind" will open an account in Switzerland.

    I'm pretty sure normal people who aren't trying to launder drug money or hide their ill-gotten fortunes from taxes will still open bank accounts in Switzerland.

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  3. Anonymous, above, does not really understand the potential problem. Essentially, the US now has capital controls. That means everybody's savings, particularly IRA's and 401K's, are at the mercy of a money hungry government. The idea behind Swiss banking is not to launder money, it is to protect it from a rapacious US government. The government claims taxes, but that is not their real intent.

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  4. The fracturing of civilization continues. It might be a good idea to consider moving assets out of the US in case you have to make a run for it.

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  5. So much for financial privacy, which is dying to thunderous applause from the entitlement-dependent masses...

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  6. The comment above by June 17, 2010 7:33 PM Anonymous is indeed moronic. The issue has everything to do with the protection of UBS at the expense of individual freedom. Some of these accounts are likely tied to fraudulent or other criminal activity. But the vast majority of these are no more corrupt than typical Governments who claim to be acting in the interests of its citizens. This issue has far reaching consequences and the actions of the Swiss legislators have essentially sold the entire Swiss banking system down the river.

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  7. It sounds like Anonymous above approves of government theft and the transfer of wealth by force.

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  8. TRUST and a "right to privacy" are the
    reasons Swiss banks were the first choice. Now, they are not even on the list! The Swiss people will loss more than their profitable banking economy- they will loss their jobs and lifestyle.

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  9. The poor hapless American has only two choices, the money laundry or the dry cleaner.

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  10. Americans now have to pay an "exit tax" to become an expatriate (along with Cubans). This only points to the reality that we are far from a nation of liberty. And this game is in the first inning.

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  11. As a working-stiff troglodyte to TFTB, I can
    ID with the basically rich/scared bunch, but
    how do you legislate things such that the true
    criminal elements are properly "dealt with",
    and let pass those of "nobly earned" stature?
    The mega-super-rich won't be affected at all
    of course IMO, just those who could help make
    new starter companies to try to put our failing
    country back to the work ethic...not some
    "redistibution" or "entitlement" ethic, as
    some (in office now) would have it.

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  12. Harry Browne was right about so much - I still have all of his books on my bookshelf and refer to them very often. If we had only implemented Harry's ideas more fully....

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  13. The capital controls referred to in a couple of remarks above can easily be avoided - think hard!

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  14. Most "criminals" sending their money to the Swiss attained their gains because the nanny state outlawed certain substances, but the market and sales continue to florish. Another group of criminals send their bribe money to the Swiss. Humm, who might be bribed? Is it possible that our honorable politicians might be bribed? Naw, thats conspiracy thinking!

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  15. If the Government deserve to know the truth what about its people?

    What is in the Federal Reserve Bank?
    it’s private.
    Is there any gold inside Fort Knox?
    Sorry it’s private.
    If so how much?
    Sorry it’s private.
    Which bank received the $2 trillion U.S. loan program bailed out money?
    Sorry it’s private.
    Do the Fed or the Government use offshore accounts to do mysterious transactions?
    Sorry it’s private.

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  16. If the Government deserve to know the truth what about its people?

    What is in the Federal Reserve Bank?
    Sorry it’s private.
    Is there any gold inside Fort Knox?
    Sorry it’s private.
    If so, how much?
    Sorry it’s private.
    Which bank received the $2 trillion U.S. loan program bailed out money?
    Sorry it’s private.
    Does the Fed or the Government use offshore accounts to do mysterious transactions?
    Sorry it’s private.
    Can I do like the FED and pay my taxes the same way they buy Junk or valueless Bonds from banks ?
    No that would be counterfeiting.

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  17. Can I do like the FED and pay my taxes the same way they buy Junk or valueless Bonds from banks ?

    Sorry that would be counterfeiting.

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  18. Yup, they sold out for the benefit of UBS.
    On one hand, one has to hope that they suffer for it, and UBS first of all, but on the other, one still wishes for Switzerland to remain a haven of safety.
    What's left? panama, Duabai, etc? Not nearly as good.
    Then of course ther is Singapore, they won't cave so easily.

    What's left now for US citizens?
    Taking assets out of the US to protect them form inevitable future seizures, either by higher taxes or outright confiscation.
    That has happened before.

    How to do that? Take the IRS greed-driven gift, whereby they treat, and tax, gold as a non-monetary asset, a collectible.
    Capital gains wise that stinks, as it means 28%, and will probably go up going forward too, but it als means that gold worth more than $10,000 does NOT need to be declared when taking out of the country, YET.

    Moving assets into gold, and expatriating that gold can still be done, and is worth something to consider.

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  19. Actually gold can be tax free. You can buy it with the Federal Reserve Notes (FRN) you already paid tax on. If you do need FRNs, simply sell at the going rate for FRNs, but you should pay cap gain taxes on it. It's the Law! Of course you will not have a receipt when you buy and you will not get a 1099 when you sell. Without these papers people may sometimes forget to pay the tax. ETFs like GLD are very open to the IRS, so you can't forget to pay the tax. Hard gold is actually very easy to smuggle out as customs only searches incoming baggage. And yep, currently you do not need to declare it when leaving. They only count FRNs.

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  20. one shouldn't have to pay capital gains taxes when exchanging gold for FRN's just as one doesn't pay taxes when exchanging two $5s for a $10.

    Gold is money according to the US constitution. Just because dollars are constantly being counterfeited which causes their value to decrease doesn't mean that holding real money (gold or silver) which merely retains its value should be taxed when one wants change for a gold ounce and chooses to get that change in FRNs.

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  21. Where will I hide my illegal drug profits now? ...and I just expanded into selling crack and medical marijuana at at the local junior high schools! Man, these feds gotta chill homies..

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  22. jeffersonianidealJune 18, 2010 at 5:57 PM

    Harry Browne was correct on Swiss banking and about countless other political, social and economic matters. His absence is certainly felt, on a near daily basis, by his fellow libertarians and all free thinkers. Harry was a true champion of liberty, a voice of reason and a principled and wise human being. In addition, he was the consummate talk show host, never belittling anyone who disagreed with him but always allowing an opposing viewpoint to have their full say, even if it meant keeping them on the line during a station break. We miss you Harry and your loss effects an entire Nation in a way that most of its citizens will never realize.

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  23. The late, great, magnificent Harry Browne is sorely missed. Anyone who has not read his 7 Vital Principles of Government (at harrybrowne.org) should do so. His commentary and insight are brilliant and timeless. The political parasites in DC and state governments (with rare exceptions such as Ron Paul) couldn't shine his shoes.

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