The ongoing revelations are proving to be a source of consternation for investment banks, wealthy individuals and businesses. They're also giving Congress additional ammunition as it tries to pass legislation to close up tax loopholes that encourage people and companies to hide assets in accounts abroad or set up entities where the assets can be transferred.
Despite all the hoopla, though, it seems that the use of tax shelters is on the wane in some quarters. One reason for this, beyond enforcement by the tax authorities, may well be the Bush tax cuts, which had the effect of lessening the need for wealthy individuals to hide their assets from the IRS in tax shelters. Still, despite the tax cuts, assets clearly are still being squirreled away in tax haven countries. A combination of embarrassment, enforcement and increasing cooperation by banks abroad are leading to a get-tough approach that's ultimately forcing more individuals and businesses to report their holdings and pay up at home.
That's exactly what it's about.
And it's going to work.