c060ee70   
   XPost: can.general, can.politics, ott.general   
   From: Canuck57@nospam.com   
      
   On 06/09/2011 11:46 AM, Alan Baggett wrote:   
   > Canada’s Tax Haven to the South :CRA SOTW   
   >   
   > Tax haven America   
   > U.S. and its banks called world's 'biggest tax haven'   
   > IRS event aims to force banks to report foreign nationals' accounts   
   >   
   > Posted May 18, 2011, 11:38 am   
   > Michael Hudson Center for Public Integrity   
   >   
   > Teams of private bankers working for powerful banks court wealthy   
   > people from distant shores with this sales pitch: Move your cash to   
   > our country. We will keep it safe and secret.   
   >   
   > That was the modus operandi of UBS, the Swiss banking giant that was   
   > forced to admit holding billions of dollars in covert accounts for   
   > Americans trying to avoid U.S. taxes.   
   > It is also a tactic used by big American banks to solicit deposits   
   > from wealthy citizens in Third World countries, according to tax-   
   > evasion experts.   
   >   
   > Even as the U.S. Internal Revenue Service crusades against Americans   
   > using offshore banks to hide money, these tax experts say, the United   
   > States itself serves as a massive haven for international tax cheats.   
   >   
   > “We’re the biggest tax haven in the world,” says Robert Goulder,   
   > editor-in-chief of U.S.-based Tax Notes International . “People joke   
   > about the Cayman Islands. The biggest haven is an island, all right.   
   > It’s either Manhattan or Great Britain.”   
   >   
   > Jack Blum, a former U.S. Senate investigator and an authority on   
   > offshore tax shelters, says U.S. bankers “sell tax evasion to citizens   
   > of Central America, the Caribbean, all over Latin America.” The U.S.   
   > government hasn’t put a stop to it, Blum says, because bankers and   
   > politicians don’t want to stop the flow of foreign cash into the   
   > United States.   
   > American banks deny they enable tax evasion by citizens of other   
   > lands.   
   >   
   > Alex Sanchez, president of the Florida Bankers Association, says Latin   
   > Americans move their money to the United States not to evade taxes but   
   > to keep it safe from tyrants and kidnappers.   
   >   
   > “People down there don’t trust their institutions,” Sanchez says. “You   
   > think people trust (Venezuelan President) Hugo Chavez? You think they   
   > trust the Colombian government with all the narco-traffickers and   
   > corruption down there?”   
   > ‘Growing global consensus’   
   > Foreign depositors have placed an estimated $3.6 trillion with U.S.   
   > banks and securities firms, a Department of Commerce study reported.   
   > Much of the money isn’t disclosed to tax authorities in their home   
   > countries, according to Blum and other critics of U.S. tax haven   
   > practices.   
   >   
   > The American government provides little help to Mexico and other   
   > poorer countries whose citizens have squirreled money in the United   
   > States. U.S. officials can’t tell these countries about their   
   > citizens’ bank accounts here because the government doesn’t collect   
   > the information.   
   >   
   > Under American law, non-U.S. citizens living outside the United States   
   > who deposit money in U.S. banks are not subject to U.S. taxes, and the   
   > deposits and interest don’t have to be reported. The one exception:   
   > money deposited by Canadians. Their government has a banking   
   > information exchange pact with the United States.   
   > Mexican officials have pleaded to get the same deal that Canada has   
   > with Washington, but without luck so far.   
   >   
   > In January, the IRS revived a 2001 plan that would require U.S. banks   
   > to report interest paid to foreign nationals. The agency said its   
   > updated proposal reflects a “growing global consensus” about the need   
   > for nations to cooperate on tax enforcement. The previous proposal,   
   > which was pushed out the door just days before President Bill Clinton   
   > left office, was later narrowed by the Bush administration to apply   
   > only to Canadians.   
   > The new IRS move has sparked a flurry of complaints from bankers and   
   > politicians in Florida and other states that attract large sums of   
   > foreign money. All 25 members of Florida’s U.S. House delegation—   
   > Republicans and Democrats alike—wrote President Barack Obama to say   
   > that the proposal could cause “irreparable harm to the U.S. economy”   
   > by scaring away foreign capital.   
   >   
   > The dispute may heat up even more Wednesday when the IRS convenes a   
   > public meeting on the proposed rule.   
   >   
   > The Florida Bankers Association’s Sanchez says the session will be   
   > lively, with IRS bureaucrats getting an earful from him and others   
   > opposed to the plan. “I’m very passionate about this,” he says. “This   
   > is just the wrong idea at the wrong time for our country.”   
   >   
   > Opponents of the IRS plan were expected to outnumber supporters at the   
   > meeting. Other scheduled speakers include representatives from the   
   > Florida International Bankers Association, the American Bankers   
   > Association and the Cato Institute.   
   > A history as a haven   
   >   
   > Investigations over the past half century have uncovered many examples   
   > of Third World dictators and drug cartels laundering money through   
   > U.S. banks. A 1999 U.S. Senate investigation reported that Citibank   
   > had had “a rogues’ gallery of private bank clients,” including two   
   > daughters of former Indonesian President Suharto, a strongman who was   
   > alleged to have looted billions of dollars from his country.   
   >   
   > But the problem isn’t just drug lords and political grafters, Tax   
   > Notes International ’s Goulder says. It’s also plastic surgeons,   
   > dentists, architects and other affluent Latin Americans who are   
   > usually law-abiding citizens — except when it comes to reporting their   
   > incomes and bank balances to tax collectors.   
   >   
   > U.S. bankers began a concerted push in the 1970s to lure so-called hot   
   > money from a wide range of well-off Latin Americans seeking to avoid   
   > taxes in their home countries, according to James S. Henry, a former   
   > chief economist for McKinsey&  Co. and author of books and papers on   
   > offshore money.   
   >   
   > By the mid-1980s, Henry says, his research revealed Citibank was   
   > taking more money out of developing nations than it was lending to   
   > them, and its private banking group had become its most profitable   
   > unit.   
   >   
   > Citibank, Henry wrote, “resorted to skullduggery and the flouting of   
   > local laws all over the planet.” It sent private bankers undercover to   
   > Argentina, Venezuela and other destinations, helping to spawn   
   > thousands of shell companies and “concealing vast sums of flight   
   > capital from Third World tax authorities” while lobbying Congress to   
   > maintain “near-Swiss secrecy” for foreign depositors, Henry claims.   
   >   
   > A Citigroup spokesman declined to comment on its private banking   
   > unit’s history in Latin America and other regions.   
   >   
   > Dirty money moving from Latin America to the United States isn’t a   
      
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