In Switzerland, tax evasion is not a crime, but it is a crime to break tax secrecy. In fact, one Swiss bank employee who discovered that his employer was burning the records of Jewish clients who were Holocaust victims had to seek political asylum in the U.S.

The bank: UBS.

Just one tidbit from a comprehensive Guardian article on why Switzerland is public enemy #1 in the tax haven world.

http://www.guardian.co.uk/business/2009/feb/05/tax-gap-avoidance-switzerland

including where I found the info for my last post, is the Tax Justice Network, http://www.taxjustice.net/cms/front_content.php?idcat=2. It's the best single source out there for news and links to current research. As with the Guardian series, it takes on legal tax avoidance as well as illegal tax evasion, which is important because tax avoidance destroys the progressivity of tax system and completely distorts economic decision-making towards transactions that have no economic value but reduce tax.

A good example is Wachovia's old scam of leasing European infrastructure (such as sewer systems and subway lines), leasing it back to the cities that owned them, and taking accelerated depreciation on the leased assets to reduce their tax bill by some $4 billion a year before the IRS cracked down. There was no economic purpose to the transactions (they didn't modernize the leased infrastructure or do anything to it at all); it was purely a tax ploy. This is why we have to fight tax avoidance as well as tax evasion.

The Guardian is running a major series of investigatory articles on tax avoidance called "The Tax Gap." With seven reporters assigned to it, they are putting a lot more resources into this issue than any U.S. paper of which I am aware. The series includes data on the taxes paid worldwide by the FTSE 100 (the UK counterpart to the Dow Jones averages) over a four-year period, estimates of the cost of tax avoidance, case studies of various tax havens and corporations using them, and much more. There is a Feb. 19 story on how Gordon Brown is leading a charge against tax havens such as Switzerland, though it should not be forgotten that the U.K. includes a number of dependencies which are tax havens, such as Gibraltar, the Channel Islands, Bermuda, and the Cayman Islands. This is a must-read for anyone who wants to understand the necessity for cracking down on these abuses.

The great thing about this series is that it does not focus on tax evasion (which is illegal), but on tax avoidance, the use of all sorts of legal but abusive ways of reducing tax by corporations and rich individuals.

http://www.guardian.co.uk/business/series/tax-gap