Financial Crisis Brings Opportunity for G-20 to Go After Swiss Banks

In the continued escalation of the “global financial collapse,” governments and their politicians are looking far and wide to find scapegoats to blame and thus provide reason for increased regulatory control, i.e. increased government power. While in this process of “who-done-it?” the United States and it’s G-20 allies are also taking this opportunity to go after foreign nations that for decades have been at odds with tax policy; mainly Switzerland and it’s very private Swedish banking system.

In “Swiss to Review Banking Secrecy Laws” David Crawford describes a situation where the US government is looking to sue Swiss bank, UBS, to force the company to expose over 52,000 American depositors. Our government believes there are over $14.8 Billion worth of assets being held in the Swiss banking system. The article goes on to state that French President Nicolas Sarkozy said the G-20 meeting planned to take place in coming weeks could put Switzerland on a “planned blacklist of tax haven-nations.” Why would the US and its allies be so concerned with UBS and the Swiss banking system at a time when the world has its own banking problems to deal with? As the article states, the G-20 are planning to meet to discuss the financial crisis and create a “unified strategy to force tax haven nations to bring their banking secrecy laws in line with international standards.” Politicians have learned a first class lesson through the tactics used by the Bush administration, and even within the first 45 days of President Obama’s leadership; governments can accomplish anything they choose when there’s enough fear and panic created in the hearts of their citizens. It’s the timeless classic of taking advantage of the situation.

It’s well documented that since the Swiss created a law in 1934 that made divulging customer bank account details a criminal offense rather than a civil matter, world governments have been on the attack attempting to force Switzerland to give up names of foreign investors who they believe are evading taxes in their home countries. The question governments should be asking themselves is not how we can force the Swiss banking system to hand over account holders’ information, but rather, why are so many willing to invest in the foreign nations banking system to evade their own government’s tax system?

Of course, this is too simplistic of an approach to be looked into as that would mean admittance that tax codes, such as the one in the US, are too imposing upon those who earn a large amount of money, aka “the rich.” Which, according to our new President, are those couples who earn a combined income of $250,000 or more, or individuals who earn $200,000 or more. US citizens wish to keep more of the money they’ve earned rather than having to be forced to give it to their government that at a whim, can take it upon themselves to determine how much to penalize “the rich” for their success. President Obama’s new tax plan, which would increase taxes for the top earners in the country from 33% to 36% and 36% to 39.6%, as well as impose a 45% tax rate on couples estates valued at more than $7 million (Obama Seeks $1 Trillion Tax Increase in Budget Plan). Can you blame those who’ve worked hard to achieve the American dream for wanting to find a place to save more of their assets?

When you add in state income and sales taxes, these individuals end up paying approximately 45 to 55% of their income to the government. It’s only logical that people like doctors, entrepreneurs, business and sales executives, lawyers, dentists, and others who earn these levels of income earn these amounts and more given the level of dedication, risk, and hard work it takes to reach such status. Try imagining someone you don’t know asking you to hand over 4-6 months of your income to them because they feel they know how to better use that money than you do.

When the G-20 meets, there will be discussions about what to do with Switzerland and other foreign nations who have private banking systems. However, the real topic of discussion will be how to increasingly impose a global financial system to be used to stave off the possibility of having another worldly financial collapse. As they meet, enjoying their time together, discussing their ensuing political and governmental clout, the true culprit of our financial failure will be back in the US most likely writing another book shoring up his legacy and defending his actions, the ex-FED chairman, Alan Greenspan. As Bernard’s First Law of Money states: “When the people own the money, they control the government. When the government owns the money, it controls the people.”