Sticking it to the Swiss Banks - One Less Hiding Place but Still Plenty Out There

Dark Skies for Tax Dodgers

December 31 is the end of an era for many Americans and the Swiss banks that have helped them dodge taxes for many years.  The Swiss bank account has always had the cachet of being the haute hiding place for money made in our country that those oh so patriotic wealthy want protected from having to pay for roads used to move their commerce or police and army used to protect them from the poor.  Nothing says screw the poor quite like a number with no name attached in a bank in Geneva or Bern or Zurich.  Well the party is quickly coming to an end.

Since the first warning shot was fired in 2009 when Washington fined UBS, Switzerland's largest bank, $780 million for helping Americans avoid paying taxes, the Swiss government has sought to comply with new rules and banks across that country are getting in step.  They will begin to make their records available to federal prosecutors and prepare to pay fines.  Billions of dollars in US currency have avoided taxation in Switzerland over the years so what does this mean now?  Are our wealthy patriots going to have to start paying their fair share?  I mean we're frequently told how much of the tax burden they already take on so how can they find fairness with the Swiss option going away?

Well, first, let's be clear, when you see statistics that say that the top whatever percent pay some whopping percentage of the total tax intake in our country it's totally misleading.  The anti-tax folks are taking what would be the corporate tax rate times whatever a company's gross is; that's before all the deductions, tax breaks, subsidies, etc. kick in.  And all you're seeing is the income tax, not fees paid by average Americans or sales taxes as part of the much larger pie.  So pity the poor right wingers, right?  You'll frequently hear how the big corporations would love to pay their share if only our corporate tax rates weren't so high.

Through clever accounting, tax dodges written into law, subsidies, writing forward losses, etc. many companies in America are able to avoid paying taxes and frequently get a government rebate to boot.  And should they find themselves in the unenviable position of actually having to pay their fair share they can always set up shell subsidiaries overseas.  According to Citizens for Tax Justice over a trillion dollars made by American companies is in foreign tax havens and hasn't been taxed by any foreign government, much less our government.  Again, these companies say they'd just love to repatriate this money if it weren't for our horribly unfair tax code.  I mean really, they would love to do the right thing but it just isn't possible.  Everyone knows shareholders are much more important than roads, schools, defense, that stuff.  And why should these companies be expected to have any patriotism anyway?  Everyone knows patriotism is for poor people.

Anti-Tax Nutjob Grover Norquist

Leading the charge in the anti-tax arena is Grover Norquist whose group, Americans for Tax Reform (reform meaning ending taxation), leads the fight for these companies.  In the world of Norquist any tax is unfair and any income the federal government gets is by theft.  Sound like an anarchy?  Feudalism?  Well, no, this is what the right calls Libertarianism.  Everything the government does, except when it's protecting the interests of corporations overseas, see the Dole Fruit Company in Nicaragua in the 1920s, or giving subsidies to large farming concerns or Park Avenue tree growers, is demonstrably evil.  What Norquist does is just more of what keeps the right in power in large parts of this country.  He claims to represent the little guy by opposing taxes across the board.  In the meantime, like while Romney was governor of Massachusetts, while taxes may not have gone up, state and local governments increase fees and local sales taxes which hit the average citizen but rarely have any effect on corporations.  The government gets its money and it's off the back of the common people; everybody is happy.  Well on Wall Street at least.  Of course good old common man warrior Norquist is a Harvard graduate and board member of the National Rifle Association but you only invoke cries of ivory tower when it's a Dem saying it.

The Big Four Swindlers

So what about all the other tax havens out there?  Where are they?  Well you can thank our good buddies the British of course.  British territories make up the majority of the tax havens of which companies the world over can take advantage.  According to reports from the Tax Justice Network some $32 trillion is stashed in the Cayman Islands, the British Virgin Islands, the Isle of Man, and Jersey (not our Jersey of course).  This while Prime Minister David Cameron, with Britain being the current leader of the G8, stated his intent to "rewrite the rules on tax and transparency for the benefit of countries right across the world".  So while tackling Switzerland is admirable, the U.S. will further have to go after the British banks who profit from the other part of the swindle:  Barclays, Royal Bank of Scotland, Lloyds, and HSBC.

Again, thank God for the Elizabeth Warrens of the world.  They continue to try to hold these financial institutions' feet to the fire.  But at some point we, as a country, are going to have to lay down the law and say if you want to sell in our markets and profit off the backs of our workforce you're going to have to play by our rules.  And our rules need to be changed so that those companies who take advantage of our protections, our markets, our workers have to pay their fair share for the benefit.  Right now that's simply not the case.