Another update to the disgruntled computer technician story: Sen. Carl Levin told ABC News that Swiss banking giant UBS’s banking license should be revoked until the bank “cleans up its act.” The bank is accused of arranging “undeclared” accounts for an estimated 19,000 US citizens, effectively “hiding” $18 billion from the IRS.
“I don’t think that any bank that goes to the extent that UBS has gone through to avoid doing what their agreements with the United States require them to do, should be allowed to continue to do business unless they clean up their act,” Levin said.
The Senator also revealed a list of “sneaky tricks” that the bank was using to skirt U.S. laws and provide services that it was not licensed to offer. Here’s the list:
Tax Haven Bank Secrecy Tricks
- Code Names for Clients
- Pay Phones, not Business Phones
- Foreign Area Codes
- Undeclared Accounts
- Encrypted Computers
- Transfer Companies to Cover Tracks
- Foreign Shell Companies
- Fake Charitable Trusts
- Straw Man Settlors
- Captive Trustees
- Anonymous Wire Transfers
- Disguised Business Trips
- Counter-Surveillance Training
- Foreign Credit Cards
- Hold Mail
- Shred Files
Prepared by the U.S. Senate Permanent Subcommittee on Investigations, July 2008.
One UBS banker has already plead guilty and admitted to (among other things) smuggling diamonds purchased using a US client’s Swiss bank account into the country by hiding them inside tubes of toothpaste. Classy!
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@chrisjames: To your first point that may be true, except your ignoring the cost, convenience, and peace of mind factors. All the lawyers and Accountants and Banks you need to pay to make sure you don’t get caught add up in a hurry, especially since you only want to pay for the best of the best so you don’t get caught and go to jail. Also you lose money because it becomes harder to invest and if your lucky the money might get an interest rate to match inflation at best.
Then there is the convenience factor. You can’t just go to the ATM to get your money. You have to initiate a wire transfer and have your experts run it through your shell company’s and so you have more transaction fees and a wait.
So knowing that you have these issues avoiding the taxes when you see that instead of losing 90% of your money to taxes (as someone above proposed) you would only lose 50% it begins to look real appealing. You are already losing probably 25% or more to costs and not earning any money with that money. Plus you don’t have to live in fear of going to jail and can enjoy your money guilt free.
As for your second point, well i’m not sure where you were going with it. It kind of rambled so sum it up if you want.
Hey! Imagine that! The good senator is up for re-election this year. How interesting that his decision to “stand up for the little guy and stick it to the rich folk” coincides with an election cycle.
@Ubik2501: The context of my response had little to do with any of that.
@dtmoore: Try doing business with a bunch of illiterate folk… might change your mind on the importance of taxing everyone to support public schools
@Peeved Guy: Wow! Thats amazing! So when he doesn’t come through, does that mean we can get rid of him?
Oh right…we’d have to wait six years…
@Tmoney02: Switching to a consumption tax instead of an income tax would also screw over everyone who invested in a Roth IRA. People who invested in traditional IRAs would look pretty smart, though.
@failurate: Because our public school system is working so well? Honestly, ask any teacher and they will tell you to get the federal government uninvolved with the school systems. But how does the federal government have such influence you might ask? They take our tax dollars and proportion them out through the DoE, thus if local schools do not comply, they don’t get funding. If all school taxes were local (which I wouldn’t mind paying even though I don’t have kids, well less so than federal taxes) we would not have this issue.
p.s. my sister, mother, and quite a few friends are all teachers so I have a pretty good perspective on the whole thing.
Since when has consumption tax even been an option/issue. I don’t think the people in power are giving it any thought at all, and would make all this talk seem moot…
If there really was a better system, I’m sure we’d be using it by now.
Point of this thread is what ubs has done is ILLEGAL, no matter what your opinion is. I personally feel like weed should be legal, but that doesn’t make it so.
@snoop-blog: Some of the Republican primary candidates were in favor of a version called the “FairTax.” That got people discussing it again.
…why is nobody paying attention to one very important relationship here?
Former Sen. Phil Gramm (made ‘mental recession’ comments last week) was on the board of directors of UBS until April 18, 2008, while simultaneously serving as a senior economic adviser to John McCain!!!
Did you know that Phil Gramm’s wife Wendy was a director at Enron — and was responsible for overseeing “audits,” while there?
McCain’s campaign is directly linked to this UBS fiasco.
@Orv: You mean the people who lost by a huge margin? The one who were considered to be a little too radical or extreme? Those candidates never stood a snowballs chance in hell.
@tgpt: RTFA. They want to take away UBS’s license to do business in the U.S.
Consumption tax. Bah. How oh-so-lovingly regressive.
@Orv: sorry for the ‘tude. I just got too worked up and drank too much caffeine today.
@dtmoore: Yes! Parks can be paid for by charging admission, unemployment can be paid for by taxing unemployment checks, and prisons can be paid for by the prisoners… wait… or the victims? The victims! They’re the ones benefiting.
And soup kitchens can be paid for by cooking every 10th man in line.
Your taxes are insurance – they pay for many services you use , and some that (god willing) you’ll never need. You *are* your brother’s keeper, unless you want to live in a city of shantytowns, cardboard overpass villages, and untested and unsafe products with 0 liability for the makers.
For me, I don’t need that Mad Max bullshit.
@Tmoney02: You’re right, I jumped to the Bush comparison too fast. I apologize for that. However, your initial argument was almost exactly what he said and that’s why we should raise taxes on the wealthy. I agree, there is law of diminishing returns when it comes to law enforcement activities. However, I think we’re very far from it when it comes to creating a tax enforcement system. This would also apply to the war on drugs.
@Tmoney02:I’m OK with your proposal as long as there is a rebate at the bottom and a true income tax at the top with zero deductions, exemptions, etc., if you make more than X, every dollar over X is taxed at X rate. Oh, and bring back the inheritance tax (watches heads explode).
@snoop-blog: There are a LOT more rich people than these 19000. And yes there are some. My aunt and uncle come to mind as well as several I’ve been in business with over the years.
They just don’t make the news b/c they aren’t doing anything wrong. Usually, they are doing something good – which will RARELY make the news.
Sad, isn’t it?
@dtmoore: If all schools were local, half the country wouldn’t know what evolution is. Just because the federal system is poorly run, doesn’t mean it can’t be fixed.
Don’t federal taxes fund the CDC, which prevents people infecting you with TB and other diseases?
The only people who can argue against federal taxes are DC residents who lack congressional representation.
No, the only people who can argue with federal taxes on the basis of taxation without representation are DC residents. Although if I wanted to stretch it i could say our political system is so corrupt that even though I technically have an elected official, they are already bought and paid for by someone else thus not truly representing my best interests.
And I’m not saying that the federal government serves no purpose, they have just grown grossly bloated with programs and subsidies and the costs are just insane. Our military is obviously the worst offender, but there are many many others. We spend more on our military every year than the next 10 highest spending countries combined.
I’m not for the consumption tax but I have pondered how it might work. One pro of the consumption tax is you get rid of the IRS but wouldn’t you have to replace the IRS with a similar agency to collect all the consumption tax? And if you were going to try and make the consumption tax less regressive by giving poor people a rebate of some sort wouldn’t you need to also have an agency similar to the IRS to figure out who qualifies for a rebate, as someone suggested the gov would still need a copy of your W-2. A pro of consumption tax would be to reward frugal/green behavior. A possible con of such a tax is that it probably would encourage a heck of a lot of off the books transactions (maybe you would need to get rid of cash and move to a form of currancy – i.e. debit – that the gov. could track). Would you have to pay consumption tax on necessities (i.e. food, health care, etc.)?
Someone needs to post a list of the evaders on Wikileaks.
@sleze69: Reminds me of last nights Criminal Minds…
@Orv: The “Fair Tax” is much like “cheese food”, if you have to put it in the name to convince people, it’s probably not altogether true.
robbery (n): the act or practice of robbing; larceny from the person or presence of another by violence or threat
UBS is not the problem. It’s the federal government and the IRS. I am all for anybody who can hide income from them.
@Tmoney02:
The Fair Tax that most experts talk about would include some sort of “prebate” that would ease the burden on low-income consumers. Not sure exactly how it would work, but they would somehow get their relief up front, rather than having to save receipts on everything and file a return.
The thing I haven’t seen mentioned here would be that consumption taxes are a boon for bootleggers, i.e. organized crime. People will be looking for stolen, untaxed merchandise in order to save themselves paying the 25% VAT.
@dequeued: So then I guess you might as well just give your money away to some thug in your closest ghetto. I mean, if they do rob you, you’ll have no chance of stopping them anyway, right?
@dtmoore: While I agree that our government needs some serious tune-ups (Ted Stevens that a-hole and his bridge to nowhere… ) to imply that you get nothing because you don’t need to use public schools is ridiculous. Maybe you went to a private school your entire life, but if you didn’t, then you still owe the system for educating you. Additionally, where do you think this country would head if only people WITH kids paid for the education system? Our country would go third world in a heart beat. What you seem to lack, is a “big picture” mindset…
@LouDobbsChivasJersey: And the “Fair Tax” (a load of crap name if there ever was one…) wouldn’t bring in enough money to sustain the nation. We in the middle would end up shouldering the burden while the poor and rich got off easy.
@ARP: I love to see people go berserk when say I think the “inheritance tax” is a good thing. Technically, it’s an “Estate Tax” since the estate is taxed prior to being given to the beneficiaries…
Look at the real facts about the tax-
-you didn’t earn the money you’re receiving, it was a gift. It belonged to your parents (or whomever) and you did NOTHING to earn it. And even if you did, you’d still owe income tax on it…
-It only kicks in after $2 million. Most of us will NEVER see that… and it goes up to $3.5 million in ’09
@dtmoore: That whole “me me me” attitude can only get you so far. Please take your education above an undergraduate level and understand why that would be a bad idea on most fronts.
@snoop-blog: Oh, no offense taken. You’re right, of course. I’ve said before that the “FairTax” is about as likely to happen as porcine aviation.
You, and us. Hiding 18 billion dollars. UBS.
@dtmoore:
Even if you don’t have kids, you’re personally benefiting from schools. You’re benefiting from an economy which depends on having them. Every time you get correct change you’re benefiting. You’re benefiting from having fewer kids idle during the day and vandalizing your car.
“The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.”
John Kenneth Galbraith
@dtmoore: “we revolted from england for taxation…”
You must be a very old person. Heck, even my ancestors all came to this country after the revolters were long dead.
“we revolted from england for taxation…”
Why does it matter why people who have been dead 200 years, had no electricity and shat in pots, did?
@dtmoore: While you may KNOW people that teach…. I am one. And I can say that federal funding is necessary. It isn’t the funding that we teachers complain about, it’s the bullshit rules enacted by Bush that we object to. Schools fail- cut off their money. Teach anything but abstinence… cut off the money. Not allow recruiters carte blanche… lose your funding.
Oh yeah, and NCLB… the biggest load of crap (which the dems sold us out on) you must comply, but we won’t fund you. It isn’t that the feds are funding schools… it’s who’s running the country right now.
If it weren’t for federal funding, plenty of poor counties and states would even worse off than they are now.
@cyberscribe: Excellent quote!
@dtmoore: Thank you, Mr. Libertarian. Let’s see what’s wrong with your argument:
I have to pay fees for use of the roads, but wealthy people don’t have to pay for the regulation of their stock market. Businesses aren’t taxed to protect them from crime. Public schools are abolished, so we have to pay for our children’s education, but businesses don’t have to pay for having trained workers.
Gotcha.
@dtmoore: I consider myself a libertarian, but I have to disagree with your ideas. Consumption based taxes are a regressive form of tax no matter what way you cut it.
At least in CA, all state revenue earned from gas tax is used only for road construction and traffic reduction.
Parents aren’t the only ones who benefit from a public education system–those schools are great for keeping kids out of trouble until they’re eighteen (i hope) and maybe even turn them into mindless patriotic zombies that will positively contribute to the economy and not commit crimes.
Should we minimize government intervention? Of course, but not in the areas you list.
@dtmoore: Which is why I am a firm supporter of consumption based taxes rather than a blanket income tax. Roads should be paid for with gas taxes, if you don’t have kids, you shouldn’t be paying for schools, you get the idea.
So your attitude is, only those who obtain benefits from the service should pay taxes? Okay:
Employers need educated employees, so all businesses should pay taxes for schools, not individuals. The less educated are more likely to commit crime, so anyone who wants a safe country should pay taxes for schools.
Those who use buses should pay a tax, as well as those who consume products transported by road at any time, i.e. everything.
You blather about personal responsibility yet what you are really attempting to obviate yours to society. Collective benefit is not collectivism.
@dtmoore: The problem with this user fee/consumption scheme is that it doesn’t quantify the indirect benefits and costs of government services. For example, having all people (even those who don’t have kids) pay for schools is cheaper than having them pay for jails instead. Parks and load-balanced and maintained roads contribute to cleaner air for everyone.
Yes, there is an element of unfair “redistribution of wealth” in the nation’s tax scheme, but there are many more tools that the wealthy use to redistribute wealth from the poor and middle clasee to them (three quick examples: payday loan financing terms, executive compensation in large corporations, UBS-style tax evasion).
@xkevin108x: If UBS had made their special services available to middle-class investors, maybe I would be considering them a hero. As it stands, the clients of these guys are profiting from (apart from things like diamond smuggling) government contracts for war materials and so on, loans to the government to pay for the contracts and leaving it to the rest of society to pick up the tab that the government leaves behind.
@xkevin108x: You and the other libertarians are more than welcome to move somewhere with no functional government. Of course, most of them look like something out of the “Road Warrior” without the glam makeup or infrastructure, but you can be free of the “nanny state” to go practise your “enlightened self interest” on each other.
With machetes.
Have fun.
As a person who gets paid to do people’s taxes, umm…don’t ditch the IRS, it’d KILL my income!
Seriously though, all this boo-hooing over the “death tax” (actually the Unified Transfer Tax) is something rather easily avoided and will only cost you approximately $2,000 of my time to do the estate planning and trust origination.
On the issue of income taxation as a whole, we kind of have to realize the cat is out of the proverbial bag. Half the reason why Guliani looked like such a tool (other than his inability to utter a sentence without including 9/11) is his desire to eliminate the IRS and other “unecesarry” federal agencies.
Um, the fed is responsible for employing nearly 25% of this country (be it through actual FIRS employees, contractors, and sub-contractors) and see how much President NY enjoys a budget without any real system to collect revenues other than the shoddy system of sales taxes, which are already easy to dodge if you deal primarily in cash.
In David Brin’s “Earth” the third world war was everyone vs the Swiss to stop criminal banking practices like this.
Talk about the pot calling the kettle black. Where was Mr. Levin when the cronies at Fannie Mae and Freddy Mac were fleecing the tax payers. UBS doesn’t require a bailout from the US Taxpayers.
@FCAlive:
Because they did it for us. So that we, their lineage, would not have to live the type of life they did, burdened by government oppression. And we’ve lost it. We had a free country and we gave it away. Laziness, wealth envy, and utter stupidity have cost us almost everything we have.
@Glamourdammerung:
While you may enjoy being a subject, many do not. The bigger the government here gets, the stronger the movement against it. I do not long for a country without a functional government. I long for a country with a functioning populous, absent of submissives like you.