Lucy Komisar has an article in the Mail on Swiss bank Julius Baer. The article is prefaced:
As anger mounts about the global economic meltdown, Barack Obama and other leaders are promising a war on offshore tax avoidance. But as this investigation into Swiss bank Julius Baer reveals, it will be a huge challenge.
What follows is a description of the artificial structures banks pout in place in an effort to justify the relocation of their profits to places like Cayman. It's well worth reading. It all seems entirely plausible.
So too are the comments. The first says:
Don't they have enough to sort out without going after this lot, if you keep destroying the money makers, pretty soon nobody is going to be making anything. Joe public will not see a drop in our tax rates, so its just more money for the government to fritter away. Let the off shore boys keep it, it does then arrive in the economy somewhere and not direct to a CService pension fund
- Jon, Wiltshire
That's full on Daily Mail prejudice for you. But it's wrong. The second says:
Offshore makes nothing: let's be clear about that. What it does is free-ride on those who do make real money - here in the UK, and in other major economies. What it does is let those with resources not pay the tax they rightly owe in the places where they really make their money, so undermining the rule of law, undermining democracy by denying resources to democratically elected governments to fulfil their mandate, undermining the regulation that protects us all from abuse, and in the process promoting secrecy that allows corruption to flourish.
But Lucy is wrong to be pessimistic: if we work on a case by case basis offshore will be hard to crack. That is why the real option is sanctions: hard economic sanctions to stop the economic warfare that these places wage on our state. And to stop these places providing 'the get out of regulation free' card that our banks are using.
Congratulations to Lucy for getting this out; it's another useful case study.