Switzerland: a trillion dollars in black money?
“Switzerland has become a paradise for foreign capital on which tax is not paid. The uproar from foreign governments is understandable.” These are not the words of a critic of the banks, but of private banker Konrad Hummler. He says that around 30%, or CHF 1,000 billion, of the CHF 2,800 billion or so of foreign assets in Swiss banks is untaxed “black money”.
This blogger has not seen this estimate before, although we note that it is nearly twice the size of a conservative estimate put out by TaxAnalysts in December 2007, which stated that:
"At the end of 2006, there were $607.4 billion of assets in Switzerland's financial sector beneficially owned by non-Swiss individuals who could easily be illegally avoiding tax on those assets in their home jurisdictions."
Back to the latest article in the Swiss review: the source, Konrad Hummler, is authoritative: the chairman of the Swiss Private Bankers' Association. We have commented on Herr Hummler on several occasions, and despite our fundamental disagreements with his world view, we do, in a sense, like his extremely forthright statements.
A while ago, our friends at the Berne Declaration in Switzerland, gave this slightly more anecdotal information:
"European countries are the first losers to Switzerland’s’ assistance to tax evasion. The Banca d’Italia estimates that 500 billion Euros are moved out of Italy untaxed. When Italy recently carried out a tax amnesty, almost 60 percent of the returned money came from Switzerland. If the money that was not returned is distributed similarly, then around 270 billion Euros from Italy still remain in Swiss bank accounts. In January 2003 the German finance ministry learned that the German tax evasion money invested in Swiss, Liechtenstein and Luxembourg bank accounts was estimated at 450 to 550 billion Euros. This is equivalent to a quarter of Germany’s gross national product."
Hat tip: Bruce Krasting