Swiss banking & you

Switzerland’s oldest bank, Wegelin & Company, whose foundation pre-dates that of the United States, is to close permanently after surrendering in a New York court battle against the U.S. Internal Revenue “Service.” The directors admitted to helping more than 100 wealthy Americans shelter their income from taxation. They were the last of the Swiss banks to offer this (actual) service, every other having been hounded “voluntarily” out of the business by the jackboots in Washington, DC.

Wegelin’s ability to resist was cracked last year, by a series of IRS moves against its directors which forced the bank to sell off its core non-American assets quickly, to protect the deposits of its non-American customers. The IRS prosecution tactics, against Wegelin & other Swiss banks, exhibit the lawlessness with which U.S. government agencies now habitually operate. They were able to exploit the honour of the Swiss banking system, in which directors still hold personal liability. They went after the directors individually, to get at a bank which itself had no U.S. branches, & was entirely outside IRS jurisdiction. As well, by publicizing their prosecution, they were able to wreck the bank’s business internationally: for few customers will take the risk of dealing with a bank that the U.S. government is determined to harm.

To his moral credit, the bank’s managing director, Karl Hummler — who is also incidentally the president of Neue Zürcher Zeitung, among the world’s oldest & most reliable daily newspapers — risked personal ruin to fight for the privacy of his clients. He pushed the Swiss government to defend banking customs & practices that had been recognized for centuries. Several of his fellow directors buckled, however, once their personal assets were attacked, & one at least has delivered a puling “admission” to the media that what his bank had been doing (entirely within Swiss law since time out of mind) was “wrong.” Perhaps he thought this would make the hard-faced goons at the IRS go a little easier on him personally.

The Swiss are under attack from foreign tax departments on several fronts. Their government had just come to an arrangement with the German tax authority, to turn over a large proportion of the “hidden” assets of every German national with a Swiss bank account. Unsatisfied with this act of rapine, the German Bundesrat (upper house) has refused to ratify the agreement, & now the German authorities are pushing for more.

Nanny States everywhere, themselves surpassing bankruptcy from incredibly irresponsible fiscal behaviour, are working both directly & in consort against all “offshore” locations where banking privacy is still maintained, & where they consider the tax rates to be too low. In previous generations, they tried to “make the rich pay” with ruinous graduated income taxes. The rich escaped by offshore accounts, by leaving the country themselves if necessary, or through the loopholes their lobbyists were able to get the politicians in their pay to write into tax legislation. This latter remains the American “compromise,” & the (grievously mislabelled) “fiscal cliff” deal struck two days ago contains all kinds of new loopholes & subsidies for the sort of corporations that contributed generously to the Obama campaign, especially Hollywood & media & “wind farms” (in the broadest sense).

The whole promise of democracy, as the Athenian mob quickly discovered, is the appropriation of wealth. As a great Scotsman said (Alexander Fraser Tytler, in one of the few quotations that can be traced to him on paper): from its Hellenic beginnings democracy consisted of servility to demagogues, who “maintained their influence over their partisans by the most shameful corruption & bribery, of which the means were supplied alone by the plunder of the public money.”

We (the living) now witness an advanced stage of this development, in which cooperative international efforts are directed to removing the last places on Earth where wealth might be preserved from the demonic grasp of “progressive” tax collectors. Once this object has been achieved, the agents of “democracy” may impound whatever they wish, from anyone, utilizing that monopoly of power which they have achieved by the reduction to impotence of every agency in civil society not already under the thumb of the government bureaucracy.

That is what Obama is about, & all that Obama is about, though let us say in his defence that he is only the latest demagogic embodiment of “progress” to enjoy the support of an idiotized electorate, & hardly among the more intelligent of the political operators. Woodrow Wilson might be presented as the first U.S. president to openly espouse “progressive” totalitarianism, articulating the ratcheting principle that has not changed from his day to this. One century after he first won election, the last restraints of the old U.S. Constitution are now being overturned, on Wilson’s own expressly anti-Constitutional argument.

It is also the centenary of the ratification of the 16th Amendment to the U.S. Constitution. This was required to enable the central government to impose income taxes, supposedly to offset tariff reductions. The basic rate was set at 1 percent; but only a tiny fraction of the population made enough money to pay even that. Who could object? The top rate of 7 percent applied only to income at a level beyond the dreams of their avarice. So why shouldn’t people who were that rich pay “a little more”?

The real significance of the income tax system was that it gave government agents the ability & right to pry into every aspect of any citizen’s private life, in search of “hidden income.” The graduated tax rates could themselves be jacked up later: the progress of progressive “progress,” as it were.

This speech, by the intelligent American pundit George Will, to a student audience in Washington University at St Louis, does a fairly good job of twirling the strands together. Will, who has no religion, is speaking in defence of the citizen’s right to practise his religion. But hear him out, O ye agnosticks, for by extension he is also defending that citizen’s right to be anything at all, outside government control; & he is defending the original American Constitution on grounds which every True British Tory happens to share. He exquisitely “pins the tail on the donkey” — showing that by “progressivism” he does not mean anything vague; & if he associates it with the Democrat Party he is not merely expressing an opinion. From Wilson to FDR, to LBJ, to Carter, to Clinton, to Obama it has been, demonstrably, their constant theme.

Why do I defend the rich? Not for their own sakes; God knows they have done me no favours. It is because they are used by the politicians to excite that public envy & greed, by which the liberties of all the people are ultimately undone. For what can be brought down upon the rich — who can afford lawyers for good fellowship — can then be brought down so much more easily upon you, gentle reader — who face the hard-faced goons of “progress” & “democracy” all by your lonely little self. And with the fate of your children bundled nicely on the table.