Friday, July 18, 2008

US Senate - Carl Levin's statement

We would like to point to a statement by Carl Levin before the U.S. Senate Permanent Subcommittee on Investigations. A few paragraphs are worth highlighting, such as this one:

About 50 tax havens operate in the world today. Their twin hallmarks are secrecy and tax avoidance. Some tax havens are little known places like Andorra and Vanuatu that few Americans have heard of. Others, like Switzerland and Liechtenstein, are notorious for operating behind an iron ring of secrecy. Billions and billions of dollars worth of U.S. assets find their way into these secrecy tax havens, aided by banks, trust companies, accountants, lawyers, and others. Each year, the United States Treasury loses an estimated $100 billion in tax revenues from offshore tax abuses. Tax havens are engaged in economic warfare against the United States and honest, hardworking American taxpayers.

That's quite correct. The only thing he didn't mention (and it isn't his business to do so) is that this problem is replicated around the world, with developing nations in Africa and elsewhere especially vulnerable to the offshore menace.

This follows a Senate report in 2006 which states:

A sophisticated offshore industry, composed of a cadre of international professionals including tax attorneys, accountants, bankers, brokers, corporate service providers, and trust administrators, aggressively promotes offshore jurisdictions to U.S. citizens as a means to avoid taxes and creditors in their home jurisdictions. These professionals, many of whom are located or do business in the United States, advise and assist U.S. citizens on the opening of offshore accounts establishing sham trusts, and shell corporations, hiding assets offshore, and making secret use of their offshore assets here at home.

Absolutely. Something will be done about all this. We would like also to highlight this statement from Carl Levin, which we applaud, as it's something that we've recently called for:

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

TJN's John Christensen was quoted in Time Magazine and on ABC prime time television on all this. More details from the hearings are available here. The full report from the Permanent Subcommittee is here.

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