Friday, March 12, 2010 
WSJ Reports on Swiss Tax Havens
In evening news, Deborah Ball of The Wall Street Journal reports on the crackdown of tax evasion in Switzerland, especially in relation to Europe.
While most attention has been focused on the US probe of Swiss tax havens, more attention should be paid to Europe’s relationship with Switzerland, according to the story.
“Americans have made up no more than 5% of Switzerland’s $1.8 trillion offshore-banking business.”
“Now, in the wake of the American crackdown, and Switzerland’s cooperation, an exodus of European money is under way. According to consulting group McKinsey & Co., Western European money makes up 51% of legacy assets in Switzerland, but only about a third of new money.”
“According to KPMG, as much as 80% of the Europeans’ money in Switzerland is undeclared. In all, KPMG reckons that tax evasion could represent up to 25% of Switzerland’s total private-banking market.”
“It’s a big mistake to say this is an American issue,” says Philip Marcovici, a Zurich partner at law firm Baker & McKenzie. “The Europeans are right around the corner.”
“To be sure, the demise of the tax-dodging business is akin to a melting ice cube, and the speed at which it dissolves will depend on how aggressive European governments — whose rhetoric in clamping down on tax deadbeats has exceeded real action — will be. No other government has been as aggressive as the U.S. has in putting up demands that the Swiss hand over names of suspected tax dodgers.”
As long as the tax dodgers in government have money there, other European governments may not go after it. In the US banks competeing with Swiss banks here may have decided to try to level the playing field by getting the government to go “after tax dodgers”.
Comment by rich — October 30, 2009 @ 1:06 pm
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