You hear about Obama “spending his political capital” on things like the Gates/ race issue and his plan for health care reform. Yesterday I wrote about how the United States put a lot of pressure on a Swiss Bank, UBS, to release the names of over 52,000 depositors there- something the Swiss banking system is set on not doing. Turns out the U.S. had also sued them last year for hundreds of billions in unpaid taxes, presumably from people who have accounts there or were suspected of having accounts there. What business does the U.S. have asking private Swiss banks to give out the names of people who keep their money there? None. Swiss banks could, of course, release the names or make them available, as many banks do, but the secrecy of account holders is the cornerstone of why Swiss banking is popular. Independent of wars is why the Geneva Convention happened there, and independent of outside scrutiny is why so much secret banking goes on there.
The UBS is going to release those names. There again, politics and money are linked. Why does the U.S. want them so badly? Because of unpaid taxes- the U.S. needs and wants that revenue. The game of tax evasion just isn’t fun anymore for the U.S. government.
Along these lines, there is something called the International “white list,” a list of countries who use an internationally recognized set of tax standards. This list seems to be monitored by the Organization for Economic Cooperation and Development. Great name. Are they linked to the IMF or the World Bank?Just checking…
The big announcement this week is that the British Virgin Islands and the Cayman Islands, two countries famous for hosting off-shore accounts where large sums of money can be hidden from tax liability, will join that “white list.”
"Today the British Virgin Islands and the Cayman Islands take their place alongside other countries that have substantially implemented the internationally agreed tax standard," said Jeffrey Owens, OECD Center head for Tax Policy and Administration.
The G20 has been cracking down since April on countries that are not cooperating with cross-border tax evasions. There again is where the politics of money come into play. The really fun question, I think, is how many politicians have accounts in those countries, or how many lobbyists, and just how much of that untaxed money is actually being used to do the business of politics. New information may come to the surface, but for now we are looking at a new challenge for accountants, some new rules for taxes, and hopefully more tax revenue for the United States.