Offshore Asset Protection BLOG - Bob Bauman

Creeping Levinism

"Tax havens are engaged in economic warfare against the United States and honest, hardworking American taxpayers." That’s the Big Lie put out last week by leftist U.S. Sen. Carl Levin, (D-Mich)., chairman of the Senate Permanent Investigations Subcommittee.

Levin’s histrionic performance involves more than a little irony.

He chairs the same notorious Senate subcommittee that, half century ago, was headed by the late Senator Joseph R. McCarthy (R-Wisc) who became its chairman in 1953. It was what some felt was McCarthy's reckless use of this subcommittee in pursuing the very real Communist infiltration of the U.S. government that gave rise to a term of opprobrium, especially among the liberal left -- "McCarthyism."

McCarthyism to this day is still defined as "the practice of making unfair allegations or using unfair investigative techniques, in many instances unsupported by proof or based on slight, doubtful, or irrelevant evidence." (Random House Unabridged Dictionary, 2006)

Levinism - The New McCarthyism

Let me suggest a new odious term when it comes to the unrelenting and phony attacks on the world's legitimate tax havens -- that word is "Levinism." For an exact definition, especially as it pertains to attacks on tax havens, see "McCarthyism" above.

Last week Levinism, with all its bombastic hyperbole, was on display under the approving gaze of the Senator's carefully courted media attention. Once again, his chosen targets were a straw man of his own creation, those evil tax havens of the world that the Michigan ultra-liberal hates with a totalitarian passion.

Repeat Performance

As I previously have noted, this Levinism hearing is only one in a recurrent series dating back several years, all of them adhering to the same theatrical theme of wild accusations based on little proof. The basic Levin charge, repeated ad nauseum, that the IRS supposedly loses $100 billion a year because allegedly thousands of American tax payers use offshore tax havens and banks to hide their income and evade taxes.

(That mythical $100 billion figure has never been proven, in spite a four inch long footnote #1 in the subcommittees latest "report" that accompanied the hearing).

Levin's star witness against tax havens surely lacks credibility and he wasn't even at the hearing -- instead the videotaped testimony by Heinrich Kieber showed him as a silhouette against a white screen, a shadowy crook with eyeglasses, a balding head apparent. Kieber is said to be living under a new name in an undisclosed "witness protection program", and is wanted by Interpol and Liechtenstein police for grand theft and violation of bank secrecy laws.

The German secret police agency, the Federal Intelligence Service (BND), (equivalent of the U.S. Central Intelligence Agency), paid an illegal €5 million, (US$7.3 million) bribe to Keiber, a disgruntled employee of LGT Bank in Liechtenstein.

And this is what Levinism passes off as a credible witness.

Guilty as Charged

Several witnesses summoned by the subcommittee declined to testify on Fifth Amendment (self-incrimination) grounds, but Levin and his subcommittee, acting as prosecutor, judge and jury, already had publicly smeared these persons, accusing them of tax evasion.

The other star witness actually showed up -- Mark Branson, chief financial officer of UBS' global wealth management. He surprised the hearing stating that UBS, allegedly having been caught assisting tax evasion, regrets "any compliance failures that may have occurred" and will no longer provide banking services to U.S. citizens.

He said the bank also is working to sell out its estimated 19,000 American clients to the IRS, helping to identify those involved in U.S. "tax fraud" -- although under Swiss law non-payment of taxes is not a crime and UBS probably will be violating Swiss law if they rat on the clients they allegedly helped avoid taxes.

Obama Says "Me Too!"

On a political note, Democratic presidential contender Sen. Barack Obama (D-Ill) praised the subcommittee's work, claiming: "Ordinary Americans pick up the slack for tax cheats who hide assets in offshore tax havens, often with the help of foreign banks like UBS and LGT."

The Illinois Democrat called for passage of legislation to allow the IRS to investigate and prosecute financial wrongdoing in offshore tax havens, (a power the IRS already has in abundance, in case the freshman senator doesn’t know it). Obama introduced radical legislation last year, along with subcommittee chairman Levin, that would seriously curtail Americans right to invest and bank offshore. If you're interested in this piece of unconstitutional trash I have commented on it before.

Patently Absurd

But lets go back to Senator Levin's McCarthyite statement that "tax havens are engaged in economic warfare against the United States and honest, hardworking American taxpayers."

This is a patent and absurd lie -- typical of Levinism at its demagogic worst.

Tax havens are free and, in most cases, independent jurisdictions freely making their successful way in this world of global economics by offering low or no taxes on foreigners who do business there. Unlike the United States, where Levinism has made certain financial privacy is dead and gone, tax havens guarantee financial privacy by law.

Unfortunately, money grubbing crooks such as Levin's darling witness, Herr Heinrich Kieber, sometimes violate those laws.

As a matter of fact, tax havens and global tax competition are positive goods that should not be curtailed, but rather expanded.

I say that if individual American are violating tax laws, let the IRS prosecute them as they have thousands before.

But let us put an end to reckless Levinism that accuses everyone who has an offshore bank or investment account of being a tax evader. Group guilt is not only illogical prejudice, up until now in America it has been, as it ever should be, unconstitutional.

* While you still can, discover the legal ways to bank and save taxes offshore; I tell you Where To Stash Your Cash: Click Here.

* If you're interested in Switzerland, Click here for Swiss Money Secrets. 

Anti-Tax Haven Smear Continues

The Permanent Subcommittee on Investigations of the U.S. Senate will hold a hearing on Thursday and the announced title of this continuing witch hunt is: 'Tax Haven Banks and U.S. Tax Compliance."

The subcommittee is chaired by Sen. Carl Levin, (D-MI) a long-time, fanatical campaigner against financial privacy in general and offshore tax havens in particular. (Levin was one of the authors of the worst parts of the PATRIOT Act that destroyed financial privacy in America).

Repeating the PR formula Levin always uses to attack tax havens, the hearings again will serve as a propaganda platform for release of a subcommittee "staff report" based on "investigative findings" that will no doubt again blast tax havens with a host of fictitious numbers pulled from thin air that supposedly show lost taxes evaded by Americans who conduct business in tax havens.

Here We Go Again

In 2006 the same subcommittee conducted a hearing circus that capped off a year long investigation costing millions of taxpayer dollars. This so-called "investigation" produced a 401 page report that advocated curtailing century old legal rights to create trusts, corporations and other entities to protect assets. It also advocated an end to all financial privacy worldwide.

Subsequently Levin sponsored the infamous "Stop Tax Haven Abuse Act," S.681, that built on the trumped up hearing and report and went over the edge in its zealous advocacy of destroying American freedoms, all under the tired excuse of collecting illegally unpaid taxes.

Millions of Americans enjoy the freedom of offshore financial activity.

Nevertheless, in their 2006 hearing based on only six cases, Levin made the startling, illogical charge that US$40 to US$70 billion in U.S. taxes illegally was evaded each year by Americans' use of offshore financial activity. The Senator offered zero proof of such wild numbers, and even then IRS Commissioner Mark Everson declined to endorse such senatorial fantasies.

In more recent propaganda barrages in support of his inane bill (which Senator Barack Obama [D-ILL] co-sponsors), the supposed tax evasion amount magically has been boosted by Levin to US$100 billion a year. Again, no proof offered.

War on Switzerland, Liechtenstein

You can bet at the Levin hearing the Senator sanctimoniously will scream about the recent alleged crimes of exactly one UBS banker and his American client (both of whom have made bargains with the feds on charges of tax evasion) and the stolen Liechtenstein bank list as fodder for their unending attack on tax havens.

The subcommittee notice states primly: "The hearing will examine how financial institutions located in offshore jurisdictions, including Liechtenstein and Switzerland, may be engaged in banking practices that could facilitate, and in some instances have resulted in, tax evasion and other misconduct by U.S. clients."

How about the thousands of people in New York and London, the world's two leading tax havens, who daily engage in tax evasion? Not enough sexy headlines there, Senator?

Act Now

My advice to prudent planners is to employ the many offshore options now still available -- investments, currency trades, banking, and asset protection plans -- while you still can. How ironic, in the age of free trade and globalization, that demagogic politicians are trying to drag America back into the isolationist Dark Ages.

* While you still can, discover the legal ways to bank and save taxes offshore; I tell you Where To Stash Your Cash: Click Here.

* If you're interested in Switzerland, Click here for Swiss Money Secrets.

Does UBS Have the Guts to Fight?

A U.S. District Court judge in Miami, Florida has authorized the U.S. Internal Revenue Service to seek information from Switzerland's largest bank, UBS, concerning American taxpayers the IRS claims may have evaded income taxes.

The court order allows the IRS to serve a summons on UBS, which has extensive operations and thousands of employees in the United States, to obtain information on possible tax fraud by thousands of Americans whose identities the IRS claims are unknown to the tax collecting agency.

U.S. District judge Joan Lenard, (who badly needs an education in the Fourth Amendment), granted the so-called "John Doe" summons a day after the U.S. Justice Department made what it called an unprecedented request for the records, part of an IRS investigation into services provided to UBS American clients from 2000 to 2007.

The IRS demand is based on nothing more than the questionable testimony of a single ex-UBS banker and his U.S. client, both singing when faced with jail time for their tax evasion. On this slender basis, the privacy of a reported 20,000 UBS American clients is being destroyed.

More of the Same

This IRS scatter gun approach seeking thousands of names without showing any probable cause of tax evasion in individual cases is a repeat of the highly questionable use of the same IRS ploy in 2001. Then it was aimed at alleged tax fraud by Americans with credit or debit cards issued by offshore banks. As I have said before http://baumanblog.sovereignsociety.com/2008/07/irs-plays-hardb.html in that case the IRS managed to obtain tens of thousands of names of VISA and MasterCard and some from American Express, the only one of the card companies to oppose and limit the broad IRS demands.

End result: a paltry 1300 taxpayers paid $170 million in back taxes after the IRS claimed that tens of thousands of taxpayers owed billions.

Will UBS Fight

The big question now is whether UBS, the supposed giant of Swiss banking, will have the guts to take a strong stand based on the Swiss bank secrecy laws and fight for the principle of its clients' financial privacy.

That means the bank, already on shaky grounds financially because of billions in losses from its stupid sub-prime housing loan investments, must appeal the court order to block the production of the American names. Indeed, I think they should fight it right up to the U.S. Supreme Court, if necessary.

If UBS fails to defend its clients' privacy, as Swiss law certainly allows them to do, every UBS client who values their privacy immediately should transfer their accounts elsewhere. (We can recommend far more reliable Swiss or other banks).

Prior UBS Sellout

But don't bet on UBS standing up for privacy, if their past history is an example.

Disturbing to privacy seekers was (and is) a previous UBS surrender under pressure to demands of the U.S. Federal Reserve System. Official U.S. acceptance of the 1998 merger of Swiss Bank Corp. and Union Bank of Switzerland creating UBS AG was approved by the Federal Reserve only after UBS agreed to provide U.S. regulators all information "necessary to determine and enforce compliance with [U.S.] federal law." No doubt, that means U.S. tax laws too. Perhaps the IRS will call in that chit now.

U.S. regulators had threatened to shut down the bank's extensive U.S. operations (an unstated threat that still hangs over UBS now). Rather than defend their client’s privacy rights, the bank compromised. That is why we have always advised U.S. depositors considering Swiss banks to avoid UBS AG and any other Swiss bank with U.S. based branches, affiliates or banking operations, other than a mere "representative office."

Swiss Law Imposes Secrecy

Unless there is a strong suspicion of criminal wrongdoing, under Swiss law it is a crime for bankers to violate the secrecy of their clients. Swiss banks refuse to expose records to foreign tax authorities, unless a Swiss court order requires it. Until now in Switzerland the IRS has been up against the brick wall of statutory bank secrecy that can be pierced only by judicial decree in almost all cases.

In Switzerland bank secrecy is not just a right but also an obligation imposed on the banks and their employees to keep secret information relating to their customers.

Swiss banks are prohibited from responding to inquiries about an individual account, whether from attorneys, credit rating services or foreign governments. Under Swiss law banks must furnish information and testify before public authorities. But in instances involving criminal offenses under the laws of other countries (including tax and foreign currency crimes) that are not crimes under Swiss law, Swiss banks have no obligation to provide information or to testify.

In most cases, the Swiss government cannot obtain information about an account without a court order. To obtain an order, investigators must demonstrate the probable violation of Swiss law and that there is reason to believe the particular account at issue is involved in that violation. Non-payment of foreign taxes is not a crime in Switzerland, but "tax fraud" is, and no doubt the IRS hopes that is a rather elastic phrase.

A guarantee of bank secrecy was added to the Swiss Constitution in 2005 and a violation is punishable under Article 47 of the Banking Law, even after termination of an official or employment relationship and even after retirement from banking. The law imposes a fine of up to CHF50’000 (US$38,800) and six months in prison.

1934 Swiss Bank Secrecy Law as amended in 1971 - Whoever divulges information entrusted to him in his capacity as officer, commissioner of a bank, as a representative of the Banking Commission, officer or employee or as a recognized auditing company, or who has become aware of such information in this capacity, and whoever tries to induce others to violate professional secrecy, shall be punished by prison up to 6 months or by fine up to CHF 50’000. The violation of professional secrecy remains punishable even after termination of the official or employment relationship or the exercise of the profession. (Art. 47, Federal Law on Banks and Savings Banks).

Make the IRS Prove It

I'll repeat what I have said before -- if the DOJ and IRS have probable cause to believe any individual American has illegally avoided taxes, that person should be investigated and prosecuted if the evidence warrants it -- which is what they did in the instant case.

But the IRS has no right to assume that every American with a UBS bank account is ipso facto guilty of tax evasion, nor should they have the right to access the banking information of tens of thousands of innocent persons in a massive fishing expedition.

If a Bank of America banker and a BOA bank account holder both pleaded guilty to conspiring to engage in tax evasion, on that grounds should the IRS be given the names and information about millions of BOA bank account clients?

There is still a Fourth Amendment in the Bill of Rights prohibiting unreasonable searches, as tattered as it may be under the Bush regime, but that Amendment and Swiss banking secrecy law should be more than enough grounds for UBS and its lawyers to appeal this horrendous court ruling.

But don’t hold your breath.

* While you still can, discover the legal ways to bank and save taxes offshore; I tell you Where To Stash Your Cash. Click here.

* If you're interested in Switzerland, click here for Swiss Money Secrets.

Swiss Vote on Citizenship

In a national referendum last Sunday Swiss voters defeated a measure that would have approved the current practice of allowing secret votes by townspeople on granting citizenship to foreigners living in their communities.

Some wishful thinkers on the Swiss political left claimed that the vote was a blow to the powerful conservative Swiss People’s Party, (SVP), which initiated the measure. Nearly 64% of voters cast "no" ballots, and the measure gained a majority in only one of the country’s 26 cantons.

In recent years Switzerland has seen a gradual shift to the right in the political party landscape. The conservative Swiss People's Party (SVP), previously the junior partner in four-party coalition governments, more than doubled its voting share from 11% in 1987 to 22.5% in 1999 and to 26.6% in 2003. In last elections in 2007 the SVP took 28.8% of the vote for the House of Representatives, up 2.1% from 2003, the greatest vote increase among the four governing parties since 1919, winning 62 of the 200 seats in the House.

In the 2007 election the SVP took a strongly anti-immigration stand. The SVP has risen rapidly in politics, asking for the will of the people in referendums is common in Switzerland’s direct democracy, and the SVP regularly leads initiatives on questions over foreigners asylum and against entry to the European Union.

Enough Is Enough

The Swiss have shown a growing resistance to immigration and granting citizenship. The measure defeated in Sunday's vote would have overturned a 2003 Swiss Federal Court ruling that held that secret citizenship votes by townspeople on foreign residents were unconstitutional. Despite that ruling, the practice has continued in some parts of the country. Some cantons required a public referendum on whether to admit specific lists of applicants and many foreign individuals have been rejected in these votes.

Switzerland has done its part in accepting foreigners, especially refugees. Its population has grown from 1.7 million in 1815 to 7.5 million in 2008. The population has risen by an impressive 750,000 since 1990, including many immigrants. Switzerland has one of Europe’s highest percentages of foreigners living within its borders exceeded only by Liechtenstein and Luxembourg. Of the 7.4 million residents, about 1.4 million, or 20%, are from other countries, especially workers from Spain, Portugal, Italy, and various parts of the former Yugoslavia.

Tough Requirements

For a foreign national, Switzerland is not the easiest place in the world to obtain either permanent residence or full citizenship, but neither one is an impossible goal.

Obtaining the right to become a resident in Switzerland has never been easy, and has become increasingly difficult. Once accepted for residence, however, Swiss citizenship may be available eventually. Switzerland has some of the toughest naturalization rules in Europe. To apply, you must live in the country legally for at least 12 years, pay taxes, and have no criminal record. Until the Sunday vote the application could still be turned down by a vote of a local commune.

Welcome for Selected Foreigners

For financially independent foreign individuals, business investors, and entrepreneurs, it may be possible to obtain a special deal for residence in Switzerland.

That deal currently covers 3,600 foreigners who pay an average CHF75,000 (Swiss francs) (US$60,050) each in tax, earning Switzerland CHF300 million Swiss francs (US$240.2 million) per year. The system allows foreign citizens living there to negotiate a fixed tax rate based on their Swiss property factors, excluding income earned outside Switzerland. Deals vary widely among the 26 cantons, but the basic formula is to calculate a minimum of five times the annual rent or the rental value of the expatriate's home and his living expenses. That amount is taxed at an average rate of 30% and that can mean a huge savings on taxes.

As someone who often has visited and written about Switzerland, my guess is that the Sunday vote says more about the Swiss being a hospitable people -- which they certainly are -- rather than indicating a sea change in a nationally conservative attitude towards immigration.

* To find out about possible residence in Switzerland, and all about the Swiss, see my new book, Swiss Money Secrets. Click here http://www.web-purchases.com/190SSMON/E190J355/landing.html

Luxembourg Quietly Thrives as Corporate Tax Haven

Over the years I have not written a lot about the Grand Duchy of Luxembourg as one of Europe's leading tax havens -- although it most definitely fits that definition by any standard. That's because the tiny nation is primarily a business and banking haven, rather than a personal tax haven.

Indeed, the official government line is that Luxembourg is not a tax haven, only a leading "international financial center."

As American youngsters are wont to say when something makes only a trivial difference: "Whatever!"

Luxembourg’s citizens know that their economy has thrived because of the attraction of its fund industry and banks as leaders in the European market for worldwide investors. However the official government attitude is stated by the prime minister’s spokesperson: "We do not consider ourselves as a tax haven," he said recently.

Grand Old Duchy

Situated in the heart of Europe, it is well known that the Grand Duchy, one of the founding members of what became the European Economic Community (EEC), and now one of the richest EU member states, derives its prosperity from its status as Europe’s #1 investment fund center and as one of the world’s leading hubs for global fund clearing and distribution, as well as home to thousands of virtually tax exempt corporate holding companies. Over 22,000 persons are employed directly or indirectly in the nation's more than 200 banks and upwards of 20% of the GDP flows from the banking business.

In spite of the usual leftist media blitz against tax havens in February after the German government broke the law paying a multi-million euro bribe for a stolen bank client list from nearby Liechtenstein, Luxembourg, with bank secercy laws almost as strict as those of Liechtenstein, is hardly nervous about the future.

Together with Belgium and Austria, Luxembourg remains an exception to EU anti-bank secrecy rules and its laws still prohibit revealing bank information to the outside world, except in criminal matters. If you want a no-nonsense EU base for business operations and excellent private banking services, this is the place. Here bankers act as stock brokers and investment managers as well.

The Grand Duchy’s Central Bank governor, Yves Mersch, described financial privacy as "...part of our social consensus. Confidentiality in a small country is extremely important for the maintenance of democratic rule." The Grand Duchy's treasury minister, Luc Frieden, states that "...the system of [EU tax directive] withholding tax works well. We transfer quite an impressive amount of tax to other member states of the European Union. We should not change things again that work well."

Dirty Money?

Of course the "usual suspects" on the Left see Luxembourg, (or any place fortunate to have strong financial privacy laws), as a sinister place harboring dirty money and tax evasion.

But a local lawyer echoes my usual mantra, saying: "A clear distinction should be drawn between tax avoidance and money laundering. It is a question of perspective. The fight against money laundering where the origin of funds comes from gun smuggling or drug trafficking is far different than avoiding tax. In Luxembourg failing to report earned income is not considered a crime. Luxembourg's investment and bank funds are strictly authorized and supervised by the financial regulator, the "Commission de Surveillance du Secteur Financier" (CSSF). If banks or other professional have the slightest suspicion about a transaction, they are under obligation to inform the respective authorities without delay."

Even after all the recent fuss about Liechtenstein, Treasury Minister Frieden drew the line: "Luxembourg’s government sees no need and will not come up with new proposals to change the bank confidentiality rules; they have proven to be in the interest of a good working system in Europe."

* To find out all about Luxembourg and other places where you may be able to lower or avoid taxes legally, click here http://web-purchases.com/190STHOW/W190H723/

Avoidance Is Its Own Reward

The late, influential and decidedly liberal economist, John Maynard Keynes, (1883 - 1946), once sagely observed: "The avoidance of taxes is the only intellectual pursuit that carries any reward."

What a kidder that Keynes was. Surely he knew that many other intellectual pursuits, (reading, writing, philosophizing, dreaming about money or sex), also has intellectual rewards. 

It was certainly with the worthy goal of legal tax avoidance that this week Shire Pharmaceutical, a leading British drug firm, announced plans to relocate to Dublin for tax purposes.

Irish Tax Haven

Ireland is well known for having one of the lowest corporate tax rate (12.5%) among the 27 EU nations. (Only Cyprus is lower with a corporate tax of 10%). That Irish low tax compares with a hefty 28% tax in the U.K. But, according to reports, what bugs Shire and a host of other companies is Britain's policy on foreign dividend income. Many countries, including Switzerland and the Netherlands, have holding company tax regimes that enable firms to import dividends tax-free from foreign subsidiaries. Only profits earned within the country are taxed. Shire says it is moving not by a desire to avoid tax, but out of concern that Britain will tighten up rules further with anti-avoidance measures that will harm multinationals, such as Shire, that earn profits from a many overseas subsidiaries.

Other companies have already voted with their feet. Shire is the first FTSE 100 company to shift its domicile, but tax advisers say that a number of others are considering it. The big drug firm is following Experian to Ireland, and Yahoo and Kraft Foods recently moved their European headquarters from Britain to lower tax Switzerland.

The Labour government doesn't seem to realize that higher taxes on business and the rich are self-defeating, sending mobile taxpayers to greener low-tax pastures. Recent changes to the UK tax regime - including a £60,000 (US$30,000) annual tax for non domiciled foreign workers in the U.K. – and present discussions about the rules governing overseas corporate earnings, give British companies with big international operations major concern.

More Taxes to Come?

Is the Labour government going to make the UK tax environment even less attractive? Shire isn't waiting to find out. It's shifting domicile to Dublin, where the corporate tax regime is already more friendly. And a lot more stable.

PM Gordon Brown in 2006 said that the key to economic success in a globalizing world is not just stability in monetary and fiscal policy but also “stability through a stable and competitive tax regime”. Yet the UK tax regime has been anything but stable and increasingly less competitive.

For many business leaders, the recent changes to capital gains tax and the tax assault on non-dom workers was the last straw. They have lost confidence in Labour's commitment to stability and competitiveness. Companies and people indeed are voting with their feet. Goodbye U.K. Another good example of why tax competition among nations is a positive benefit for all.

* Find out why smart taxpayers are moving to Switzerland. Just published -- my latest book, Swiss Money Secrets, explores in detail Swiss bank secrecy, low taxes, possible residence for foreigners and current policies. For your copy, click here: LINK: http://www.web-purchases.com/190SSMON/E190J355/landing.html

U.K. Tax Haven Dead?

Yet another example of the beneficial impact of international tax competition may see a major shift of the wealthy from London to Switzerland and/or Monaco.

When the British Labour Party first won power in 1994 one of now Prime Minister Gordon Brown's pledges was to close the so-called "non-dom loophole" when Labour came to power.

The non-dom loophole refers to a provision in United Kingdom tax law that, until now, has made it a major tax haven, but with a different twist -- the U.K. gives major tax breaks to wealthy foreigners who actually make their home there. Under the law, anyone living in Britain and not born there simply can choose the non-domiciled tax status and thereby escape almost all income taxes. The tax break was originally formulated in 1799 to help British colonialists avoid tax on their overseas income.

That means scores of billionaires living there only pay tax on the relatively small amount of money they bring into the U.K. each year. They do not pay U.K. taxes on their much larger worldwide earnings. This has made London a tax haven for everyone from Russian oil tycoons to thousands of international investment and hedge fund bankers. The country now has 68 billionaires - three times as many as four years ago. Only three of its 10 richest people were born in Britain. A current estimate of 150,000 to 200,000 non-doms for 2007 is “entirely reasonable” says one expert.

Wealth Tax

But now the Labour Party, egged on by the so-called "Conservative" Party, is considering imposing an annual minimum tax on all foreigners in the U.K. who claim non-dom status -- a fee of £30,000 (US$62,000). Cato Institute tax expert Dan Mitchell suggests that higher U.K. taxes would result in a major shift of economic activity to Switzerland.

According to the The Times of London, lower tax  Switzerland would welcome the opportunity to make their system more attractive to the British financial services industry who well may want to move. The Labour proposal would exclude those who have lived in the U.K. for less than seven years. This is so a not to scare away the many hundreds of bright foreign bankers who come to the City for a few years and then go elsewhere. But experts says the new fee effectively raises the tax paid by a U.K. private equity or hedge fund manager on his investments from 10% to 18%.

The Labour Party pro-tax shift is attributed partly to embarrassments over millions in non-dom Labour political fund donations and the International Monetary Fund’s designation of London as a de facto tax haven.

But even talking tough on non-doms remains risky. Hedge fund managers have only to move to Zurich and the new tax may result in a big net loss to the Exchequer. “The Monaco property market is booming,” a leading real estate agent mused, referring to that tax haven for the wealthy. “These people already feel on safer ground there.”

OECD Complains Again

Those Left leaning busybodies at the Organization for Economic and Community Development (OECD), ensconced in the tax-free luxury of their Paris ivory towers, are whining again about the few stalwart nations that still defend the right to enjoy financial privacy and banking secrecy. (In America financial privacy is dead and gone, killed by the unconstitutional PATRIOT Act).

The most recent OECD criticism, (their anti-tax haven sideshow has been going on now for over a decade), is aimed in part at the Republic of Panama's continuing (and very correct) refusal to violate its own national bank secrecy laws by exchanging tax information with other governments. (Panama has no tax information exchange treaties with any nation).

But Panama is in very good company when it comes to the OECD targets. This round of OECD yapping is aimed not just at Panama but also Switzerland, Austria, Liechtenstein and Singapore -- all equally respectable offshore financial centers -- all with strict financial privacy laws that the OECD bureaucrats hate -- not only because the OECD represents the major nations' tax collectors, but because these high tax nations pay the OECD's tax-free salaries.

The OECD claims that many offshore financial centers are "making progress in improving transparency and international co-operation to counter offshore tax evasion" but they insist that those who don't tow the OECD line still fall short of "international standards."

The OECD says "significant restrictions on access to bank information for tax purposes remain in three OECD countries (Austria, Luxembourg and Switzerland) and in a number of offshore financial centers (e.g Cyprus, Liechtenstein, Panama and Singapore)."

That should be a major hint as to where you should do your banking offshore -- if you want guaranteed financial privacy. Unfortunately, there are only a few nations that still guarantee financial privacy by law.

If you're looking for maximum privacy and legal tax avoidance, we can explain where these places are and how you can take advantage of them. Click here for some ideas on where to look.  http://www1.youreletters.com/t/1357788/2309209/831463/4533/

Escape from America

In spite of the many disturbing trends in America about which I must write, (all too often it seems), I still have a modicum of hope that our nation will endure and prosper. But that won't happen without a clear recognition of our problems and a determined effort to address them.

Unfortunately, the current crop of American presidential wanabees doesn't bolster what may be my misplaced hope. While many still are willing to stay and fight the good fight, many Americans have had enough.

A 1999 U.S. State Department survey of its embassies and consulates suggested a total of 4.1 million Americans living overseas at that time. Every year about 250,000 U.S. citizens and resident aliens leave America to make a new home in some other nation. The U.S. Bureau of the Census in 2005 upped this estimate, guessing that over 350,000 US citizens and resident aliens would leave the United States permanently.

Many of these are wealthy people seeking to escape what they see as the excessive taxes and political tyranny of the United States government. And increasingly, much of this exodus is not only composed of of retirees -- but younger Americans.

John Gaver of Action America.org notes: "The problem is that increasingly, the wealthy perceive that they are under attack by their own government and they are taking the only rational option left open to them. They're taking their wealth and leaving."

Figures Don't Lie

Recent in-depth surveys (2006-2007) were done by the well known pollster, Zogby International, of adult Americans on the subject of possible relocation outside the United.States. With more than 115,000 respondents, the remarkable survey excluded anyone relocating offshore for less than two years, or because of requirements of the government, the military or their jobs. The Zogby results compared against the entire U.S. population (now about 303,116,000) are shocking. The numbers below are for households, not individuals:
• 1.6 million U.S. households have already decided to relocate offshore and are now moving in that direction. That figure remained stable over the year and a half during which seven surveys were conducted.
• Another 1.8 million households are seriously considering relocation and are likely to do it. Many have taken preliminary steps.
• 7.7 million households are "somewhat seriously" considering relocation and "may" do it.

• Nearly 3 million households are seriously considering the purchase of a vacation home or other property outside the U.S., and another 10 million are "somewhat" seriously considering it.

This means that almost 10% of U.S. households are considering leaving the country. Another 10% are considering living outside the country part time. This silent massive emigration is ignored by nearly every analyst. These would-be emigrant households plan to spend an average of $260,000 on the purchase or construction of a house, and at least $36,000 annually on living expenses outside the U.S. In total, they represent the emigration of hundreds of billions of dollars a year from the U.S. economy.

One eye-opening fact: the single largest group that already has made the decision to relocate offshore -- households where adults are 25 to 34 years old.

The Soaked Rich

One of the factors that is driving wealthy Americans to live offshore is the tax burden.

Yet the constant false drumbeat of class warfare U.S. politicians and their left-wing allies in the news media is that "rich" Americans do not pay their fair share of taxes. Only last week, would-be president Hillary Clinton proposed increasing estate and other taxes on wealthy Americans in order to transfer money to those persons who earn less, this loot to be used to set up government sponsored retirement accounts. The late U.S. Senator Huey P. Long of Louisiana used to call this sort of robbery of the "rich" to pay the "poor" his plan to "redistribute the wealth."

But this myth of the rich not paying their fair share is given the lie by figures just released by the Internal Revenue Service for 2005 (the most recent available) that show the top-earning 1% of U.S. taxpayers earned 21.20% of the income and paid 39.38% of the tax collected -- or almost double their share, based upon the income they earned.

In addition to paying double their share of taxes, there are other good reasons for this offshore exodus of the wealthy. Well-to-do Americans face frivolous lawsuits by the greedy, in ever growing numbers. They, like all Americans, have lost any semblance of privacy in their personal and business transactions. Their business dealings are saddled with onerous PATRIOT Act and Sarbanes-Oxley Act requirements that consume time and money. And they have little defense against having their property confiscated under civil forfeiture by the government money police.

We Can Help

The Sovereign Society exists to give advice and direction to those interested in "going offshore." With a decade of experience, we can offer a reliable road map to offshore freedom, including legal ways to protect assets, lower taxes, expand investments and how (and where) to move your residence and/or citizenship offshore.

If a move offshore interests you, whether older or younger, we can help.

Left Targets Switzerland

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 dash of international envy -- and you can understand why Switzerland is always under siege in the left-wing dominated world news media.

The latest anti-Swiss media campaign started weeks ago with the approach of the Swiss national parliamentary elections to be held on Oct. 21st. The anti-Swiss outcry is being led by the usual suspects, self-appointed representatives of the United Nations, the European Union, and Amnesty International.

What has upset these do-gooders is a campaign theme being used by the Swiss Peoples Party (SPP), the largest of several national political parties. The theme addresses a major Swiss domestic concern, the huge influx in recent years of foreigners into the nation. The theme is expressed in what the Left sees as a controversial campaign poster showing three white sheep kicking a black sheep off a Swiss flag above the slogan, "For more security."

The poster is the creation of the anti-immigration SPP, which in three decades has grown from a small group to the party with the largest number of seats -- 55 of the 200 -- in parliament's lower house, the National Council, and a major player in the coalition government. Indeed, opinion polls show the SPP again leading the other parties in the run up to the election.

Chain Saw Reporting

As if the United States did not have any problems of its own with illegal immigration and crimes committed by unlawful immigrants, The Washington Post wins the prize for sensationalized reporting on Switzerland. It published a truly horrific story about a 37-year-old black Angolan man living in Zurich who was attacked and seriously injured by chain saw wielding thugs shouting racial epithets. The article suggests wrongly that many other Swiss people would do the same thing, given the chance.

---

The Alternative to Burying Your Assets in Your Backyard

If you're interested in protecting your assets, there are several things you can do.

You can bury your money in your backyard or under your mattress. You can put your money in a domestic bank or money market account, and earn a paltry interest.

You can invest in the so-called "safe" investments that your broker recommended on the NYSE (that supposedly produce meager 10% a year for a diversified domestic stock portfolio).

Or you can house your wealth in an offshore region, for superior investments, access to the hottest emerging markets, iron-clad asset protection and financial privacy.

The choice is yours. Click Here to learn more about the offshore option.

---

Last week, counter-demonstrators threw rocks and bottles at Swiss People's Party protesters during a political rally at the national parliament building. Police fired tear gas to break up the melee. A UN "fact-finder" on racial intolerance, accused the SPP and its campaign posters of "advocating racist and xenophobic ideas."  "That's nonsense," says Ulrich Schluer, an SPP legislator, newspaper editor and creator of the sheep campaign. "It's not against race. It's against people who break laws. People are fed up." (Sounds like Bill O'Reilly on the Fox TV network).

The SPP has initiated and won national referendums making it tougher for foreigners to enter Switzerland and obtain citizenship and easier to deport immigrants. Switzerland now has some of the strictest naturalization laws in Europe.

Enough Is Enough

Switzerland's population is now about 7.5 million, up by 750,000 since 1990. It generously has opened its borders to refugees from many nations and now has one of Europe’s highest percentages of foreigners living within its borders, many of them workers from Spain, Portugal, Italy, and parts of the former Yugoslavia. More than 20% (1.4 million) of Swiss inhabitants are foreign nationals, and the SPP argues that a disproportionate number are lawbreakers. Many drug dealers are foreign, and according to federal statistics, about 70% of the prison population is non-Swiss.

In recent years, there has been a growing resistance to immigration and granting citizenship. Some cantons (provinces) now require a public referendum on whether to admit applicants and many individuals have been rejected in these votes, as the law permits.

In the best of all worlds, no one should support racism. But Switzerland probably is no better or worse than other European nations (or the United States) when it comes to trying to deal with a massive influx of foreign persons. At the very least, every nation has the right to protect its citizens from criminal activity, regardless of who the culprits may be.

But you can bet that much of the current anti-Swiss media uproar is just another phase in the left's continuing anti-Swiss campaign. And you can also be certain the very independent Swiss will go their own way -- without the need for advice from outsiders.

For more information about Switzerland as an offshore financial haven, click here:
http://web-purchases.com/190STHOW/W190H723/

Report from Switzerland

I am writing from beautiful Zurich, Switzerland, home of the sinister “gnomes of Zurich,” according to Harold Wilson.

In 1956, Wilson, then member of UK’s Labour Party opposition, claimed these “gnomes of Zurich” triggered the speculation that caused the devaluation of the venerable British pound sterling.

It’s a great tribute to the power of Switzerland that the financiers in just one Swiss city could cause the mighty British pound to falter.

After a 10-hour flight from Miami to Switzerland, I am in Zurich once again speaking at The Sovereign Society’s European Advantage Tour. This informative event also allows me the pleasure of seeing old friends with whom I often work at a long distance.

For all its financial clout, Switzerland is a small, landlocked country in the middle of Europe, albeit with a long, distinguished and sometimes controversial history that has made it today’s leading world financial center. At various times “Switzerland” or “Swiss” has been regarded as synonymous with high finance.

The Swiss franc has long been probably the world’s safest haven currency against the storms of currency fluctuations. A private Swiss bank account, the infamous “numbered account,’ in fiction and in film, was said to be the safest place in the world to store treasure or stash loot.

That’s because of the iron-clad 1935 Swiss bank secrecy law. Today Switzerland is still one of the most powerful financial centers in the world, highly important for investment funds, private banking, annuities and insurance, and it is estimated to hold one-third of the world’s private wealth.

Switzerland also consistently ranks high on quality of life indices, including high per capita income. Switzerland also has one of the highest concentrations of computer and Internet usage per capita, highest insurance coverage per person, and high good health care statistics. No wonder that over 3,600 of the world’s wealthiest expatriates call Switzerland home. (It is also one of the world’s finest offshore financial havens in the opinion of The Sovereign Society.)

Switzerland has maintained an independence that is envied and criticized, staying neutral through two World Wars. It became the headquarters of international organizations like the Red Cross, the World Trade Organization (WTO), as well as the European headquarters of the United Nations, but it resisted joining the UN until 2002. It is surrounded by members of the European Union, but has refused to join, and with good reasons.

Financial services are one of the major sectors of the economy, contributing about 6% of all jobs. Of Switzerland’s 3.2 million workers, according to government figures, about 190,000 are employed directly in finance. More than half of these – 112,000 – are in banking and another 51,000 are in insurance, with 20,500 being employed in accounting and auditing.

And that’s one of the key reasons why we are here on this European Advantage Tour – to allow our attendees to meet firsthand the professional people who make Switzerland what it is – the bankers, investment advisors, fund managers, insurance experts and attorneys.

At the moment, I am working on another new book to be entitled Swiss Money Secrets . Look for it later this year. In the meantime, if you have questions about how Switzerland can assist you in estate planning, investing, banking, asset protection or increasing your financial privacy, I and our Sovereign Society Swiss experts will be pleased to assist you.