The $100 Billion Lineup

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Tax cheats come in all shapes and sizes, so it would be hard to pick out of a lineup the 100 Americans whom the IRS suspects of hiding funds in Liechtenstein, a tiny Alpine country known for opening bank accounts and accepting large deposits of funds with few questions asked.

In contrast, identifying the guilty in a lineup of nations that facilitate international tax evasion is comparatively easy. Even before recent disclosures dramatized Liechtenstein as a roadblock to those of us fighting tax evasion, the nation had been identified by the Organization for Economic Cooperation and Development as an "uncooperative" tax haven that routinely declines to help other countries enforce their tax laws.

A tax haven is a jurisdiction with low taxes or no taxes and secrecy laws and practices that make it hard for other countries to discover if their taxpayers are concealing assets there. In effect, tax havens sell secrecy to attract tax cheats, peddling their services by evoking gentler terms like "financial privacy" and "wealth management."

Liechtenstein's LGT Bank, which is controlled by the royal family, is suspected of harboring assets for thousands of tax dodgers from around the world. A nation of just 35,000 citizens -- a population so small it would not fill even a third of the football stadium at the University of Michigan -- Liechtenstein boasts more than a dozen banks with client assets that top $145 billion.

It is far from the only country holding tax evading money. Over 50 tax havens operate in the world today, helping tax cheats offload their tax burden onto the backs of honest taxpayers who are left to make up the difference. The Tax Justice Network has estimated that over $11 trillion is stashed offshore by individuals alone. In the United States, offshore tax evasion robs the U.S. Treasury of an estimated $100 billion in unpaid taxes each year.

The Senate Permanent Subcommittee on Investigations, which I chair, specializes in exposing offshore tax abuses and is now digging into the Liechtenstein tax scandal. But we do not need a new tax scandal to know that it is past time for Congress to get serious about halting offshore tax abuse. Last year I introduced the bipartisan Stop Tax Haven Abuse Act to rein in tax havens like Liechtenstein from aiding and abetting U.S. citizens who are dodging their tax obligations and ripping off honest American taxpayers in the process.

This bill contains innovative and powerful measures that could strike an immediate and strong blow against these tax dodges. These provisions would recover billions that could help pay for health care, education, manufacturing support, aid for wounded warriors, and more.

How? The bill would create a presumption that anyone in the United States who forms, sends money to or receives money from an offshore entity exercises control over that entity and can be taxed on its assets. The presumption is rebuttable. Legitimate business dealings would, of course, be permitted, but tax cheats could no longer tie the IRS in knots trying to prove a taxpayer is hiding behind an offshore entity in a tax haven.

Another provision in the bill would empower the Treasury Department to order U.S. financial institutions to stop doing business with offending banks or jurisdictions, thereby helping to cutting off access to U.S. dollars.

If the United States were to enact legislation to curb tax haven abuses, it would not be acting alone. For the first time, we are seeing a worldwide rejection of offshore business as usual. Tax authorities in Germany, Australia, the United Kingdom, France, and other countries are lining up to work in concert to shut down tax havens that have, for too long, carried on an economic war against honest taxpayers. The United States ought to be batting cleanup in that lineup.

Comments

[danceswithyids]

As a resident of Michigan, I am proud to claim Senator Levin as our Senator.
The man is intelligent and practical, he would be an asset to any administration.

[JohnnyCanuck99]

Which bank has Rumsfeld's $2.3 TRILLION?

http://www.cbsnews.com/stories/2002/01/29/eveningnews/main325985.shtml

[WIpatriot]

Senator, please help me understand WHO MAKES THE LAWS IN THIS COUNTRY?

[dadw5boys]

Consider this, Please.
If those banks that take and hide all those asests were to lose all those account information even ther backup information all that money would be lost forever.
What is the banks blew up one night when no one was there to be injured. Everything lost even the saftey deposit deposit boxes burn to a crisp.

What would happen then?
Tons of money saved in investigation cost. The lesson would be learned very quickly by all other banks around the world too. Short and sweet in and out. Mission REALLY accomplished.

[WIpatriot]

Get over it, dad. This info is backed up offsite in BMF 'puters.

[txshldm0007]

Well Senator, what are you waiting for?
What happened to the 2006 and mandate? Blogging is cheap.
I would love to see you guys you pass some bills that are veto by Governor Bush!!!

All talk no actions!!!

[bogananda666]

Corporations located outside the USA should be denied the protection of the U.S. Military. Their is no legitimate reason, except corruption, that the USA should provide socialized investment losses and military protection for investors. Hillary with her ties to Wall St. will only facilitate the socialization of investors losses and military protection for the world's investors.

[dadw5boys]

You mean Halibourton, Blackwater, and many many other contractors in Iraq who are Bahama based or Saudi based like Halibourton and KBR ?????????

[bleek]

Go get 'em, Senator Levin. You're a modern day Von Helsing, for God's sake!

Nosferatu's new hideout is Lichtenstein! Will Smith will play the part of you in the movie someday!

Oh, by the way, you might want to do a follow up post to detail all the loopholes that will exist in your bill by the time it becomes a law.

I still take you more seriously than I do Alec Baldwin.

[radicaldj]

A little more hot air from my senator. Nothing new here! The countless times I have conversed with his office have often left me feeling that energy and passion take a back seat to waffling and waiting.

[rmajh5]

As I read a news story today about the leaders of our oil companies and their defense of their current high profits, I was reminded of a message I recently received from my right foot while I was laying in bed trying to sleep.

"You know," my foot said, "you would have a better chance of getting a good night"s sleep if you would spend a few more bucks on a better pair of shoes."

This was not the first time that my foot was complaining about this issue. "The fact is," I told my foot, "very few people take the time to look at my shoes, but they are all looking at my suit and tie, so that is where the money will go."

"Okay," my foot said. "Be dense. But when your back muscles and your neck muscles begin to cry out in pain, don"t blame me. Blame yourself."

Last night my right foot talked to me again. "Hey nutcake," it said, "see any connection between my cheap shoe and the hoarding of the money that is taking place within the realm of the oil magnates?

What? Suddenly my right foot is becoming politically involved? Like it sees a comparison between itself versus my entire body and the oil barons versus the larger society?

I don"t know. Maybe I should stop by the shoe store today?

[LeonBNJ]

The abuse of these enabaling countries and territories needs to end as many billions a year are lost to governernments all over the world. They also allow corrupt politicans to hide monies they have stolen from their people, corporations to hide assets and profits from taxation or nosey shareholders and other evations not in the best interests of all. Perhaps we need to work through the UN to develop mininum standards for international busnesses, corporate domicles, banking to require disclosure of non-citizens or corporations to other authorities with apporpiate legal procedures to make sure they are not used to abuse.

[schatsie]

I agree absolutely, why should us taxpayers take it in the shorts while Paris Hilton is parading around with all of her goods being tax writeoffs for her '''business''' whatever that is.

Switserland and the Cayman Islands are totally complicit in this game and need to be shutdown, but heaven knows what will happen to their economies if that is done....them vs us...

I will always remember Poppy Bush having a Houston Hotel room as his place of residence to avoid paying state income taxes....

[BARRISTER]

what you and levin are peddling is meddling in the legislative affairs of sovereign nations. enforce your own laws within your borders and dont try to DICTATE to sovereign nations what they can and cannot do.

[Gdebs]

I am so sick of this kind of helpless crap. Senator, you are one of 100 people we give the power to write our laws and yet you sound like a helpless puppy. Stand up on the damn senate floor every day and demand that the tax laws be changed. Name names of the corporations. Explain things to the American people. You have unlimited debate. Use it. I you can't get the floor, go out on the steps and demand a change in tax law. Lead or get the hell out of the way. Watch "Mr. Smith goes to Washington."

[not one of the sheep]

He can't name names bacause it would come back to him, his collegues and his buddies and affect his gravy train. These loser senators, dem and repub, need to be booted out on thier lazy, blowhard butts and replaced by people who give a damn about the morons (us) who put these clowns in there to begin with.

[parose10]

You're so right. Any of us can blog. We need more from those who have the power to do more.

[Uselessboy]

None of this needs to matter.

First, return to a trade scheme that charges sociopathic manufacturing locales an import duty that levels the economic playing field with socially responsible countries. It protects us at the same time as establishing incentives to potential exporters to be environmentally and socially responsible. Don't kill trade, just put some drags on it with incentives to be humane.

2nd, return to 20th century top-end income taxation that lets people get rich but only reasonably rich, and slow enough that it's not worth sinking their own businesses and society for short term jackpots.

[scepticalobserver]

I think:

That there shouldn't be any write-offs for advertising or entertainment.

Profits should be taxed at a higher rate than wages.

Corporations as individual entities (that guarantees things like freedom of speech) should be abolished. Any corporation that moves their headquarters offshore to avoid taxes should be required to pay import taxes and not be allowed to lobby congress. (Nor any foreign entity. Period) We have retired officials lobbying for foreign governments against the interests of this country.

Corporate criminals should be punished within the same system that punishes theft by other means, with the same kinds of penalties.

Of course I don't know much about high finances, but out here in the hinterlands it looks like the system is rigged in favor of corporations. I don't remember reading anywhere in the Constitution about "We the people and corporations." Corporations aren't people, they're an amorphous creation that takes advantage of the protections that they've been granted by a complacent Congress and Judiciary to screw the very people that allowed them to thrive.

Without our cooperation they cease to exist. It would be nice to see Congress do something to address the inequities of this system, but given that corporations, especially big media, control who gets elected in this country, I don't have a lot of hope.

[ItsAlessandro]

All medical costs should be void of interest charges. All interest rate charges should be considered taxes. Fix the credit-protector program, PLEASE.

http://www.credit-protector.com

[MAX1]

.

I am thoroughly convinced that the Democrats are weak...

Weak on National Sovereignty as they debate the merits to undermining the People's Security from an out of control Administration that insists on violating the people's Rights.

Weak on National security as they still haven't secured our ports and borders.

Weak on fighting crime as they allow a known criminal to occupy and deface the Office of the President and Vice President of the U.S.A.

Weak on prosecution... They talk, talk, talk, talk, talk, but continue to fail to walk that talk.

I seriously think that D.C. IS the heaven the Senator talks, talks, talks about...

THE PEOPLE SHALL REMEMBER
COME VOTING TIME NOVEMBER!

.

[veracity]

Dear Senator Levin: Fundamentally, over past 2 dozen years the Democratic party leadership has allowed Republican, Big Business, & right-wing the ability to define Democrats as "tax and spenders" & "parasitic regulators." The fact is America became the world's preeminent superpower precisely because of "big government spending" during WWII, from massive war contracts, to post-war space racem Marshall plant (great for US farmers), to the GI bill, government grants, research, and higher education opportunities which paved the way for the boom years of the 50's through 90s.
(Did I mention that after WWII we copied the German autobahn system for our roads & highways which not only became the defining aspect of American culture - our automotive culture - but that the biggest construction job in history, the foundation of the American economy, was an entirely "SOCIALIZED" system?)
The Democrat's failure to defend the ideals & progress of the past 100 years is why Tax Cheats today can "frame" their off-shoring of cash in neutral, or even positive terms.
I'd like to know "where do all the billions go?" We read that the fed/treasury has pumped $1 TRILLION into the investment banks and brokerage houses over the past 9 months.... is it too much to ask, "where did all that (taxpayer backed, fed created, Treasury printed) funny money go?"
http://finance.yahoo.com/tech-ticker/article/7483/Fed-Heads-Back-to-the-Well-Will-It-Run-Dry?tickers=BSC,JPM,TMA

[ErnestineBass]

HOLY CRAP!

We should have invaded Liechtenstein.

[WIpatriot]

We don't have any Liechtensteinese interpreters, EB.
How would we know if we won the hearts and minds of the Liechtensteiners?

[feo]

Can't; not enough troops.

[Rule Of Law]

LOL!!!