Sun Aug 12th, 2012 at 07:26:01 AM EST
The advocates of the EU's current austerity regime use moralising language to justify reduced benefits and increased tax load for the middle and lower classes, but 'forget' the upper classes. As reported in the Salon three weeks ago, the Tax Justice Network estimated that the accounts of private persons in tax havens hold between $21 and $32 trillion dollars. The bulk of this is held by about 10 million people, and almost half of it by just 90,000 people. The single largest part of this by far is at UBS (followed by Credit Suisse and Goldman Sachs).
The harmony of tax havens, global elites and lenient authorities was disturbed in the last year or two, when employees of Swiss and Liechtensteinian banks sold bank data to foreign tax authorities, above all in Germany. Things seemed set to return to 'normal' when the German and Swiss governments negotiated an agreement: not unlike other recent off-shore wealth legalisation agreements, it would have involved some information sharing and the taxing of Swiss accounts at a low rate in "exchange" for the end of tax investigations and a ban on purchases of stolen bank data.
However, Germany's Social Democrats (SPD) seem to have decided to scupper the agreement. After blocking it in the upper house of the federal parliament, the SPD-Greens government of Northrhine-Westphalia state (NRW) acted in direct contradiction by purchasing another two CDs from Switzerland, this time with data from UBS. According to leaks (also in the Salon), the most important information is not the names of tax cheats, but evidence on the hollowing out of the agreement before it even comes into force: the bankers were advising German clients on moving their money further into other tax havens like Singapore.
If these claims can be evidenced, there could be legal consequences. (I'm not holding my breath though.)
The purchase of stolen bank data is certainly profitable for the states involved: according to the finance minister of NRW, previous purchases to the tune of less than €10 million led to surplus tax revenue of €300 million
. And its not just the clients caught on the CDs, but others who get scared and report themselves to pre-empt a lawsuit.
However, the defenders of the upper classes and the financial industry in Germany and Switzerland didn't tire from attacking the purchases as unethical, including politicians of the Christian Democrats (CDU), their Bavarian brethren (CSU) and the neoliberal Free Democrats (FDP). Even the Pirate Party criticised them for data protection reasons. When news of the latest purchases first came up, of course, the Swiss and German federal governments were none too pleased about the sabotage of their agreement. German finance minister Wolfgang Schäuble chose to argue that one-off purchases of stolen data are just a crutch as thy bring back less money than a general solution. This argument was crushed by the claim that the money is moving out of Switzerland. UBS and the Swiss government are denying the claim, although reportedly, the evidence is not simply electronic account data, but includes videos on which bankers explain clients how to "tax-optimise" deposits.
The appearance that the SPD is following a strategy was underlined by SPD chairman Sigmar Gabriel's quick and sharp-worded reaction: he qualified the activity of Swiss banks as organised crime, reminding that gang tax crime can be punished with up to ten years prison time; and called for threatening Swiss banks with criminal procedures like the USA did.
I'm not sure if the focus should be on evil banks with a criminal business model, though. Banks are in competition, and if there are plenty of opportunities for tax evasion and plenty of loose income, the bank that stays clean loses out on big business. Then again, the banks also lobby the governments controlling the regulators to let them continue to earn big bucks.
It would be nice if the SPD would follow through and, say, would prepare to launch a joint action with French president Hollande after an eventual 2013 election victory to undermine tax havens, whatever the tax cheat elites think. (But I'm not holding my breath about that, either.)