Say Anything Blog

The Obama administration is convinced that Swiss financial company UBS has clients who are tax cheats and wants the company to hand over their client data.  The Swiss government says that such a disclosure would violate the nation’s famed banking privacy laws and is threatening to seize the data from the company before it can be turned over.

Wealth management giant UBS is facing a court hearing in Miami next week after refusing to disclose data on 52,000 Americans holders of secret Swiss bank accounts to U.S. tax authorities.

The Swiss Justice Ministry said on Wednesday that Swiss law prevents UBS from handing over client information and the government would seize UBS client data, if necessary, to stop that happening.

The case, which comes amid a global fight against tax cheats supported by the U.S. administration, has damaged the UBS brand and could result in an expensive settlement for the bank at a time when the bank needs to focus on restructuring.

“Switzerland will use its legal authority to ensure that the bank cannot be pressured to transmit the information illegally, including if necessary by issuing an order taking effective control of the data at UBS,” the Swiss government said in a response to U.S. authorities filed in Miami on Tuesday.

What I don’t understand is why the Obama administration even wants to pursue this.  Swiss bank accounts, and all the secrecy that go with them, have been around longer than the United States has.  And now Obama expects to trample that tradition into the dust in a desperate scramble to reduce deficits by getting at tax evaders?  Granted, people should follow the law, but there are more productive ways to minimize tax cheating.  Like maybe lowering taxes to the point where people don’t feel justified in fleeing to the Swiss banking system to avoid them.

Or maybe simplifying the tax code so that it’s easier to comply with.  How about changing the tax code so that it doesn’t give the government access to our entire financial lives whenever they want it on the off chance that one of us might be evading taxes.

But I guess that might make too much sense.  Much better to get into an international showdown with Switzerland.