War Declared on Switzerland -- Again!

Last week tax hungry officials from socialist Germany and France once again declared another round in their long running war on Switzerland.

Their aim once again was against traditional Swiss bank secrecy, which the Franco-German politicians claim is little more than a cover for massive tax evasion -- (no proof offered).

Over several centuries and during two World Wars, peaceful Switzerland always has maintained its traditional neutrality. It's kept out of numerous wars involving both France and Germany, usually with the latter attacking the former.

The last time a war of sorts was declared against Switzerland was in George and Ira Geshwin's 1930 Broadway musical hit, Strike Up the Band, where the plot centered on a Babbitt-like American cheese tycoon who tries to maintain his monopoly on the U.S. market by convincing the United States government to declare war on Switzerland.

I suspect that the current effort by France and Germany will be just about as successful, (but much less entertaining), than Gershwin's spirited musical militarism.

Another Skirmish - Another Show!

Reacting to these renewed pressure from European Union officials, the Swiss government vehemently defended its tax system and its financial privacy. While this looks like another episode in the decade-old, anti-Swiss political road show, the new element this time is that EU leftists are making bogus use of the current world economic disruptions as a spurious basis to argue that tax havens cause recessions!

Switzerland repeatedly has been attacked for its low taxation and banking secrecy laws, which biased critics claim provide European citizens with loopholes for evading taxes in their own countries. These anti-Swiss demagogues ignore the fact that Switzerland participates fully in the EU tax directive program, collecting taxes from foreign account holders and paying it to their home EU governments.

The most recent criticism coincides with a rapidly spreading global financial crisis that has prompted governments worldwide to spend billions of dollars to bail out ailing banks. With a recession looming in the U.S. and Europe, governments are grasping at any straw to stop a sharp fall in tax income.

Yet Another Phony Blacklist

The Swiss Foreign Minister, Micheline Calmy-Rey, deplored the attacks on Switzerland which were triggered by an announcement from 17 countries led by France and Germany that they plan a new blacklist of tax havens. France and Germany are demanding that Switzerland be on the list.

Austria came out with support for its neighbor Switzerland against calls that it be placed on a blacklist of tax havens. "Austria will always support Switzerland," Foreign Minister Ursula Plassnik said.

No Swiss Surrender

Economists doubt, however, Switzerland will give up its banking secrecy or radically adjust its tax laws, saying the country is strong enough to defend itself against the EU's complaints. They note that Switzerland, as a member of the Organization for Economic Cooperation and Development (OECD), can effectively veto any decision by the OECD to blacklist it.

According to EU estimates, the world's tax havens, not including Switzerland, have attracted around $5 trillion to $7 trillion in assets because of low or nonexistent taxation. Swiss banks manage around $4 trillion in assets, about 50% from foreign individuals and institutions.

At present, only three European countries (God bless them!) - Liechtenstein, Monaco and Andorra - are on the OECD's tax haven blacklist.

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