Wegelin & Co. Private Bankers since 1741 Farewell America 1. A moral issue? The agreement between the USA and Switzerland under which Switzerland is to provide administrative assistance with regard to 4,450 UBS clients suspected of tax fraud is, in our view, remarkable in three ways. Firstly, we note the way both parties are dressing it up in the aftermath of the battle. Everyone is talking of a âsuccessâ. The IRS, the American tax authority, surely rightly, for it has got what it wanted, namely access to a large number of specific client names, combined with persisting uncertainty on the part of all the others as to whether they are among those names. The UBS is happy not to have to pay another fine, and to be rid of the heavy burden of legal proceedings. And the Swiss government regards it as a success inasmuch as from their perspective the agreement preserves the rule of law and offers the clients affected the possibility of legal recourse to the federal administrative court. But there are also losers, of course. These are the people affected, who must now expect legal proceedings against them as suspected tax cheats, and who had, until relatively recently, been promised that precisely this would not happen. Promised by whom? By the bank concerned (among others), which had generously interpreted and intensively exploited an explicit gap in the 2001 âQualified Intermediaryâ (QI) agreement; by the supervisory authorities, which were fully cognizant of all this activity, but never questioned it; by the Swiss government, which only a few months ago had spoken of the âbrick wallâ that foreign authorities would encounter, were they to attack Swiss banking secrecy â for example through fishing expeditions, such as an application for administrative assistance against several thousand clients. Promises, connivance, a pretence of resolute behaviour â and now collapse. The appearance of success conceals the reality of a breach of trust. Trust: is this the right word at all for something so disgraceful as tax evasion, or even tax fraud? Serves them right, these bloated capitalists, if they land in the dock! This is the position of themoralizers, as frequently stated in the Swiss media, among others. It is astounding, and this is the second interesting observation, how completely naturally those who claim the moral high-ground rush to join forces with the authorities and their financial requirements. At the risk of once again winding up certain specialists in business ethics, let us briefly recall the sort of tax authorities we are dealing with, and the sort of state they serve: a country that, over the last 60 years, has unquestionably been one of the most aggressive nations in the world. The USA has fought by far the largest number of wars, sometimes with, but mostly without a UN mandate. It has broken the international laws of war, maintained secret prisons, and fought an absurd war against drugs, with serious consequences both abroad (Columbia, Afghanistan) and at home (according to reliable sources, the tentacles of the narcotics mafia now reach well into political circles). With breathtaking moral duplicity, the USA maintains enormous offshore havens in Florida, Delaware and others of its states. The moralizers have joined sides with a nation that still makes extensive use of the death penalty, and that has a legal system under which lawyers can get rich on the misfortunes of their clients. Liability cases often end in verdicts with exorbitant damages, which makes business activity extremely risky, for medium-sized enterprises in particular. The moralizers provide intellectual support for a country that allows its infrastructure to collapse, and then stuffs convicts into hopelessly overfilled jails, after what are not infrequently dubious proceedings. They fund a nation that tolerates â or rather, causes â regular crises in the global financial system that it manages. A country whose underclass enjoys neither the benefits of an adequate education, nor a halfway functional healthcare system; a country whose economic system is increasingly inclined to overconsumption, and in which saving and investing have increasingly become alien concepts, a situation that has undoubtedly been one of the driving forces behind the current recession, with all its catastrophic consequences for the whole world. http://www.zerohedge.com/sites/default/files/Wegelin Document on American Taxes and Assets.pdf
This is the best post in this thread so far!.. You are right on! Not Only the US broke the swiss laws, But this kind of crap endangers our liberty and costs us money here in the US. "new rules may mean that people who spend limited periods of time in the U.S. acquire tax obligations." "
It seems you are right. I also found this link- http://www.irs.gov/businesses/small/international/article/0,,id=156329,00.html So, why do foreigners invest so much in the US markets with that danger in the background?
This can't possibly be ! Imagine the consequences, no foreigner would want to hold US assets, such a law would not make sense anyway, besides my guess is it would be very difficult to implement. The original link talks about "non resident alien" I believe this describes foreigners spending time in the US as a non-resident, thus this law may not apply to people living abroad , not setting foot on US soil for other reasons than for ex. vacations.
I think it's as I said "non resident alien" is a person spending time in the US as a non resident , obviously such person must pay taxes for their US based income and that extends to the stock of company they may own. But that does not apply to everyone living outside the US. EDIT : I found more here on the definition of NRA, after all it looks I am wrong , everyone outside the US is a non resident alien http://investopedia.com/terms/n/nonresidentalien.asp
A little light reading..... http://www.irs.gov/pub/irs-pdf/p519.pdf I didn't know that the US charged an 'expatriate tax' on citizens and long term residents that want to leave the US permenantly. I like how they refer to foreigners as 'Aliens'...real freindly!
Wrong, it certainly applies to people who don't live and/or who never set foot in the USA, but who had assets at the time of death that were considered to have "US situs" (like US stocks, bonds, brokerage accounts, treasuries, real estate, etc) . I know it is hard to believe. More: If you live abroad (foreigner, non citizen or green card holder) and have a, say, vacation home in the USA and you die, that house certainly will be taxed with a huge estate tax bill. Even worse, non-resident aliens (who are non citizens, non green card holders who do not meet the minimum staying in the USA to pay taxes here) have only a $60 k credit towards any assets that they have here (the rest is taxed with the huge Estate taxes rates, up to 45%). citizens and green card holders have a 2 million or so credit (in 2008), only what passes this amount is taxed. The only exception is when the USA has some treaty with your foreign country.
OK , but is this new ? Is that part of the agreement on qualified intermediaries ? How come I never heard of this ? I still think it's very difficult to implement and as a trader, itshould not affect you, you trade futures, only margin would be subject to the tax and even with other instruments you can make arrangements for the positions to be liquidated if you die, before you die.