TAX NEWS - 2010

The G-20: They're Back!

This weekend's G8 and G20 summit in Toronto, Canada is shaping up as an economic clash of civilizations, or at least a clash of EU and U.S. economic views, claims the all-knowing news media.

Second only to that theme is the media's amusement in trying to explain why the "Conservative" government of Canada spent over US$1 billion on these meetings, including an artificial "fake lake" created to impress foreign visitors.
 

Here We Go Again
 
But one certain bet is that the G20 will once again issue an Organization for Economic Co-operation and Development (OECD) pre-drafted statement blasting tax havens and tax competition among jurisdictions.
 
Now that these deficit spending welfare states have bankrupted themselves, the G20 will continue their hypocritical war against low or no tax havens.
 
Now that the G20 has bullied every former bank secrecy nation from Switzerland on down (or up?) into signing tax information exchange agreement (TIEAs), they will move on to the next step – a demand that nations now automatically exchange tax information upon request. 

 
My Opinion
 
I have written much about the G20 and its tax financed mouthpiece, the OECD. If you want a review see "G-20: Hypocrisy at Its Worst" written in March 2009 concerning the London G20 meeting.

Before that London meeting tax havens were falsely accused of being a major cause of the global recession -- as though the money lenders in London and New York had not been at the financial heart of the real cause.

But in the 2009 G-20 statement, these hypocrites showed their true goal, claiming, somewhat prematurely that: "The era of banking secrecy is over." The G20 concern was never about tax havens having caused the recession

They knew that to be a blatant lie even before they mouthed the words. From the beginning, the G20 interest always has been in collecting more taxes based on the false assumption that anyone who dares to do business offshore is automatically engaged in illegal tax evasion.


Leftist Media Campaign

As it has before each G20 confab, the leftist world media revved up the propaganda machine prior to this weekend's Toronto gathering.
 
The U.K. Guardian, a leading tax haven critic, chose once again to smear tax havens as alleged fetid sinks of dirty money laundering.

With their usual delicacy and a "birds of a feather" approach, the Guardian noted that the G20 " … agenda this week include how to deal with terrorists, drug lords, tax havens and corrupt politicians."
 
The supposedly impartial BBC News, without offering any poof, claimed to see "… a growing international consensus on the need to tax banks more heavily and to clamp down on banks' usage of tax havens."
 
A disappointed Transparency International, always willing to ride any event for its own public relations purposes, claimed that "The cross-border flow of global proceeds from criminal activities, corruption, and tax evasion is estimated at between US $1 trillion and US $1.8 trillion per year… The G20 pledged to eliminate tax havens. It claimed the days of banking secrecy were over. Not true. It is just as easy as it was at the start of the crisis to open an offshore account in several jurisdictions."


Armed IRS Agents
 
How terrible! Free people are still able to open and employ offshore bank accounts! Such madness must be crushed.
 
Time to send armed IRS agents wading ashore in a concerted attack on all those Caribbean tax havens awash in dirty cash. 
 

More Blacklists

Not to miss the bandwagon, German Chancellor Angela Merkel and Nicolas Sarkozy, French president, sent a joint letter to Stephen Harper, the Canadian prime minister who chairs the summit, urged the G20 to "pursue vigorously our fight against tax havens, money laundering, corruption, financing of terrorism and non-compliance with agreed prudential standards".
 
For those who do not comply with agreed standards, they want "coordinated and appropriate sanctions" to be put into effect. They suggest that the OECD should list tax havens not complying with the standards – a new blacklist here we come!
 

Tax Havens Alive and Well
 
Well dear readers, I am here to tell you, from my first hand knowledge and personal travels, tax havens are just as busy as ever, offering lower taxes or to taxes to smart foreigners who want to bank, invest and make a good profit.

Yes, there are all sorts of new reporting requirements, especially for U.S. persons, and yes, financial privacy has been weakened in many previously sacrosanct bank secrecy places, Switzerland, Austria and Liechtenstein included.
 
But all the right reasons for going offshore still exist – indeed those reasons are even stronger now – far better asset protection, lower taxes, better investment returns and, yes, a far greater degree of financial privacy than can be found in most major G20 nations.