Switzerland, as it has for many years, continues as the number one target of the world's welfare state governments and their rapacious tax collectors.
It is my considered opinion that Switzerland and its bank secrecy law will survive, as it always has survived -- by dint of sheer national will and determination to repel outside political dictates from any source.
All the media ruckus created a few months ago about secret bank accounts allegedly used for tax evasion in neighboring Liechtenstein was just the overture for the real show -- the plot to destroy Switzerland's bank secrecy -- at all costs.
Start out with the natural prejudice that the world's leftist elite has against wealth (except their own), add the outrage of welfare state tax collectors who hate financial privacy and bank secrecy, (which they wrongly equate with tax evasion), then throw in a large helpings of financial competition and international envy -- and you can understand why Switzerland is always under siege in the left-wing dominated world news media.
For more than a decade the political left in Europe and the United States has conducted a media war against all tax havens, especially against Switzerland, which has steadfastly refused to alter its strict financial privacy and bank secrecy laws. The still intact anti-Nazi Swiss Bank Secrecy Act of 1934 makes it a crime for anyone to reveal even the existence of a bank account in Switzerland, much less information about the account or its owner. Unlike the American government that has killed all privacy, the Swiss believe humans have an innate right to privacy that need not be justified.
At the same time, Switzerland routinely honors proper official foreign requests for information about alleged criminal activity, money laundering and tax fraud, even as it collects taxes on EU citizens with accounts there, passing on their taxes to European Union nations under the EU tax directive. Indeed, the Swiss led the way in adopting tough anti-money laundering laws and they keep them up to date.
Doubting Konrad
Last week The New York Times quoted Konrad Hummler, the managing partner of Wegelin & Company, a small private bank in the canton of St. Gallen.
The nervous Herr Hummler warned that Switzerland's role as secret banker to the world’s wealthy is under threat as never before, as he sees it. Hummler said what we all know -- that the German tax evasion scandal involving Liechtenstein has been manipulated by the media into a debate about Swiss banking secrecy, just as Europe's Leftists wanted. Worried at the degree to which the traditional discretion of Swiss banks is under assault, Hummler said his foreign clients have been inquiring about their money. The nervous Herr Hummler says that this time, Switzerland may not be able to stop the rest of the world from prying open Swiss banking.
I beg to disagree -- as should anyone who really knows the Swiss and their history.
Jealous Neighbors
What also irks Switzerland's high tax neighbors are low Swiss personal income and business taxes.
A recent report, Paying Taxes 2008 – The Global Picture, a study by the World Bank and PricewaterhouseCoopers (PwC), rates the tax systems in 178 countries according to how much tax businesses are forced to pay. Switzerland was 24th worldwide in terms of total business tax rates and second lowest in Europe, behind only Ireland. (The United State with a one of the highest corporate tax rates of 35% ranked 102nd in level of business taxes and 76th in ease of payments).
"With a total tax rate of 29.1%, Switzerland is only 0.2% behind top-ranked Ireland with 28.9%," said PwC. Switzerland did considerably better in the world listings than its jealous high tax neighbors: Germany (50.8%, ranked 124), France (66.3%, ranked 157) and Italy (76.2%, ranked 168).
Switzerland has been attracting foreign companies for these low tax reasons. A record number of firms set up shop in the country in 2007. Canton Obwalden, which drastically slashed corporate tax rates at the beginning of 2006, recorded the fastest growth.
Election Returns
In October, 2007 the conservatives won their greatest victory ever in Swiss parliamentary elections. That political fact alone helps guarantee that Switzerland will remain the world's leading offshore financial haven and that Swiss banking secrecy remains secure.
It also guarantees that Swiss relations with jealous neighbors and the EU will not be any easier. The EU has been a major critic of Swiss financial privacy laws. Swiss political leaders and the Swiss people as a whole, repeatedly have rejected demands for repeal of bank secrecy, a traditional attraction for foreign investors worldwide. Polls consistently show that 80% of Swiss support the banking confidentiality law.
I do not base my opinions about Switzerland on suppositions. I have just published my latest book, Swiss Money Secrets, which explores in detail Swiss bank secrecy, low taxes, possible residence for foreigners and many other aspects of Swiss history and current policies. For your copy, click here: LINK: http://www.web-purchases.com/190SSMON/E190J355/landing.html
Comments