Posts Tagged ‘Switzerland’

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According to the Tax Justice Network, the United States ranks second in the 2018 Financial Secrecy Index. This is based on a secrecy score of 59.8, which is practically unchanged from 2015. The only country ahead of the United States is Switzerland, with a secrecy score of 76. The rise of the United States continues a long-term trend, as the country was one of the few to increase their secrecy score in the 2015 index.

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The continued rise of the United States in the 2018 index comes on the back of a significant change in the U.S. share of the global market for offshore financial services. Between 2015 and 2018, the United States increased its market share by 14 percent. In total, the United States accounts for 22.3 percent of the global market in offshore financial services.

So, actually, we’re #1!

History

The United States has long been a secrecy jurisdiction or tax haven at the federal level. For example, the 1921 Revenue Act exempted interest income on bank deposits owned by non-US residents, and this was explicitly justified at the time as a measure to a attract (tax-evading) foreign capital to the United States.

Another factor influencing policy makers later on was the Vietnam War, which opened up growing external balance of payments deficits—after a long history of surpluses. The United States increasingly needed foreign loans to finance these deficits and it did so, in significant part, by a attracting the proceeds of tax evasion and other illicit foreign money. Foreigners invested in the United States for many reasons, not least the fact of the U.S. dollar being the global reserve currency—but secrecy and tax-free treatment were also key attractions.

Alongside this history of U.S. federal-level secrecy, individual U.S. states have been hosting the formation of secretive shell companies—especially as several states (such as Delaware, Wyoming, and Nevada) have engaged in a race to the bottom to outbid one other in offering ever more egregious secrecy facilities.

Here is how it works. A wealthy Ukrainian, say, sets up a Delaware shell company using a local company forma on agent. That Delaware agent will provide nominee officers and directors (typically lawyers) to serve as fronts for the real owners, and their details and photocopies of their passports can be made public but that gets you no closer to who the genuine Ukrainian owner of that company is: if the nominees are lawyers they are bound by attorney-client privilege not to reveal the information (if they even have it: the owner of that shell company may be another secretive shell company or trust somewhere else). The company can run millions through its bank account but nobody—whether domestic or foreign law enforcement—can crack through that form of secrecy in any efficient or effective way.

 

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Sure, Swiss voters rejected a proposal to guarantee an income to all residents, whether or not they are employed.

But 23 percent did vote in favor of the idea, which itself is a victory given the full-scale campaign against the proposal—by mainstream economists and many others.

Critics have called the initiative “a Marxist dream”, warning of sky-high costs and people quitting their jobs in droves, to the detriment of the economy. “If you pay people to do nothing, they will do nothing,” said Charles Wyplosz, economics professor at the Geneva Graduate Institute.

And then there was the anti-immigrant argument by the right-wing Swiss People’s Party (SVP):

SVP spokeswoman Luis Stamm told the BBC: “Theoretically, if Switzerland were an island [basic income] would be possible.

“You could cut down on existing social payments and instead pay a certain amount of money to every individual.

“But with open borders it’s a total impossibility. If you would offer every individual a Swiss amount of money you would have billions of people who would try to move into Switzerland.”

Still, the idea of a guaranteed basic income continues to grow, with trials planned for the Canadian province of Ontario, Finland, and the Dutch city of Utrecht.

Interest in the United States is also increasing, although a proposal by the likes of Charles Murray is going to undermine what support the idea currently has among people who actually work for a living. That’s because Murray wants to use a guaranteed income not only to replace existing anti-poverty and corporate-welfare programs, but also to eliminate Social Security and Medicare.

The whole idea behind a guaranteed income is to decommodify areas of economic and social life, building on Social Security and Medicare, which are based on the idea that the larger community uses a portion of the surplus to take care of some of its members, outside commodity exchange. Murray (along with other conservatives who support a basic income) wants to do exactly the opposite: force people to use their basic income to purchase additional commodities, even after retirement.

That’s not a guaranteed basic income. That’s just more freedom to choose private commodities.

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