Complete the following SAT logic question:
- Cyprus : Russian depositors :: Switzerland : [X]
If you answered X = US depositors (for now... soon many more), you are correct.
It has been no secret that in the aftermath of the crackdown of the Obama administration on Swiss-based "whale" accounts, Swiss banks promptly gave up on the legacy model of bank secrecy which allowed them to fund a massive banking sector that has assets (and therefore liabilities) six times greater than the GDP of Switzerland. That this has led to a literal Swiss fear and loathing of anything American, is no surprise: after all banks have blamed the informal US accords, in which the US DOJ can now expose any and every Swiss bank client for the massive layoffs that have ensued in the past several years, hitting not only megabanks UBS and Credit Suisse, but all the smaller players as well.
Now, in the aftermath of the deposit tax in Cyprus, it appears that "wealth taxation" in Switzerland is about to be taken up a notch.
As the leading Zurich financial media NZZ reported and Reuters summarized [9], the country has reached a deal in principle with the United States over undeclared funds hidden by wealthy Americans in Swiss offshore bank accounts. Naturally, the state was quick to deny it - after all, the last thing they need is a prompt exodus of all big offshore accounts held locally as fears of a Cyprus "wealth tax" on big accounts spreads.
Alas, this may be precisely what is happening. From Reuters [9]:
The plan outlined by the NZZ am Sonntag would see each Swiss bank with U.S. clients negotiating individual settlements with the United States for its role in hiding untaxed money.
Most of the 13 banks in the crosshairs of U.S. justice officials, which include Credit Suisse and Julius Baer, have said they are already in settlement negotiations.
What is new is that the remainder of Switzerland's more than 300 banks with U.S. clients would have to seek a U.S. settlement individually, according to the NZZ.
This in itself is not news. This next part, however, is: [9]
Those banks would be required to "motivate" remaining U.S. clients to come clean to U.S. tax officials. If they failed to do so, confidential bank data would be forwarded to U.S. officials. The initial shipment of data from those banks would not include client names but, based on the data, U.S. officials would be able to submit a judicial aid requests to get the names of alleged tax evaders, the newspaper said.
So after all US "whale" accounts, aka alleged tax evaders, have their bank data fully exposed to the US government which will operate under the assumption (hardly too incorrect) that all US accounts in Switzerland have evaded taxes and thus are subject to the US government's just as forcible wealth re-appropriation, how long until all other European nations, most of them just as broke as the US, follow suit?
The question then is: how many of the oligarchs, Russian or otherwise, who avoided a complete wipe out and total capital controls in Cyprus, will wait to find out if the same fate will befall them in Switzerland? Or Luxembourg? Or Lichtenstein? Or Singapore?
Or any other formerly considered "tax-haven" nation?
Finally, is it clear yet to the world's uber-wealthy that the 2013 hunting season is now open, and that they, or rather their deposits, are the prey of every socialist government in the entire world?