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Thread: more proof you can't really tax uber-rich Americans

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    Banned Melonie's Avatar
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    Default more proof you can't really tax uber-rich Americans

    Financial servicesClose
    UBS tells unit staff to avoid US visits
    By Haig Simonian in Zurich

    Published: May 27 2008 23:30 | Last updated: May 27 2008 23:30

    UBS has told members of its former private banking team responsible for rich US clients not to travel to America.

    The Swiss bank has also made lawyers available to the more than 50 bankers involved, many of whom have left UBS since it decided last November to wind down its cross-border private banking business for US *customers.

    The move follows the recent indictment of one of the unit's former senior executives, Bradley Birkenfeld, who US authorities have accused of helping a billionaire client evade taxes. Mr Birkenfeld has pleaded not guilty and his lawyers have made no public statement on the matter.

    Lawyers for Mr Birkenfeld and the US government are due to appear before a judge next Monday “to resolve pre-trial motions and discovery problems”, according to court documents.

    Many members of UBS's former US team have left the bank amid concerns about the investigations and fears that the bank might not support them if arrested. “Many of us have the feeling we'd be expendable,” said one former team member.

    People familiar with the situation said these anxieties were exacerbated by UBS's decision last December to send most of its Swiss-based US team to Art Basel Miami, a Florida arts event the bank sponsors, even though US authorities were increasing their scrutiny of the bank's activities.

    UBS's travel restrictions suggest it is concerned that the investigations by the US Department of Justice and the Securities and Exchange Commission may widen.

    Martin Liechti, UBS's Swiss-based head of international private banking for North and South America, was detained by the US authorities last month and remains in the US as a “material witness.”

    The Financial Times has learnt Mr Birkenfeld has been able to provide only two names to the US authorities, which may be fewer than investigators hoped for. One, Igor Olenicoff, a US real estate tycoon, reached a legal settlement with the US DoJ last December and is co-operating with the authorities, eople with knowledge of the situation said. Bankers suggested Mr Birkenfeld's client list may have been significantly smaller than the 20 big clients senior members of the UBS team typically handled.

    Mr Birkenfeld's relationship with the bank soured after UBS claimed he had not performed to expectations. Mr Birkenfeld took legal action against UBS over his termination and then co-operated with the US authorities.

    UBS declined to comment.

    Additional reporting by Joanna Chung in New York

    Copyright The Financial Times Limited 2008

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    © Copyright The Financial Times Ltd 2008.

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    God/dess Deogol's Avatar
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    Default Re: more proof you can't really tax uber-rich Americans

    The government cracks me up.

    First planning on suing OPEC.

    Now jailing bankers.

    It's pretty obvious when Rep. Water says she wants to "socialize" the oil companies.

    Even with the last eight years, I got a feeling the next four years are going to be even crazier.

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    God/dess Casual Observer's Avatar
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    Default Re: more proof you can't really tax uber-rich Americans

    ^ Still, the Theresa Heinz Kerry stories a few years back really illustrate how easy it is for the wealthy to avoid taxation entirely--like municipal bonds, for example.

    It's not always about cheap shots in class warfare...
    Idealism is fine, but as it approaches reality, the costs become prohibitive.

    William F. Buckley, Jr.

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    Default Re: more proof you can't really tax uber-rich Americans

    ^^^ well that was the original point, as discussed in many other threads. If politicians call for large tax increases on the rich as a means to finance new social welfare programs, history and current evidence both show that the rich will 'react' to the higher 'official' tax rates by redirecting their investments towards areas that avoid the higher taxes. Thus enacting higher 'official' tax rates on the rich does NOT produce the added tax revenue the gov't counted on to fund that social welfare benefit program, meaning the gov't must then either scale back the new social welfare program ( = pissing off low income voters = breaking promises = political suicide ) or raise taxes on the middle class (who are far less able to shelter their incomes from increased tax rates).

    As Casual points out, tax free muni bond purchases have been a big tax shelter for the uber-rich in the past. As my news blurb points out, moving money into 'anonymous' offshore investments via 'private banking' has also been a big tax shelter for the uber-rich in the past. Also from my news blurb, the commitment by UBS to their US 'private banking' customers will continue to be strong ... to the point of refusing to allow UBS employees to travel to the United States, where they would become subject to potential questioning by the IRS in regard to the offshore tax dodging activities of UBS's uber-rich American 'private banking' clients which the IRS cannot otherwise investigate in countries outside the USA.

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