Offshore Money Havens Under Attack?

With a new year and a new political administration, Barack Obama has made it no secret behind the scenes that he would consider making substantial inroads against offshore tax havens and banking secrecy that have been so heavily promoted by foreign banks like UBS. However, most of this stance may be fear-mongering among many potentially-oppressed foreigners that stand to lose billions in business since there is little official reliable information to be found on the topic. Last July, as a result of pressure from the Internal Revenue Service, UBS made the announcement that they would drop offshore banking services. UBS is not the only bank that offers these services, but as an a foreign bank with a strong American presence, UBS came under pressure to give up data that would compromise their banking secrecy, a Swiss tradition for hundreds of years. International bankers have been greatly distressed by this potential attack on tax loopholes that gives them such advantage.

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Clinton, Offshore Banking & Corporate Inversion

The debate about cutting U.S. taxes for corporations and the wealthy is largely a pretense. The issue is not whether multinational corporations, bankers and the very rich benefit from tax cuts. The majority of multinational firms walk away from all taxes. A General Accounting Office report revealed that between 1996 and 2000, 61 percent of all U.S. companies paid no federal taxes.

Saving money and avoiding taxation pitfalls is a major concern of corporations, especially in the United States where taxes are professed to be higher than in most other nations. A corporation owned and organized in the United States pays federal taxes on corporate global income. A foreign corporation pays federal taxes and state taxes only on U.S. income generated. As a result, a technique known as corporate inversion is commonly employed to lower U.S. tax impact. Without a corporate inversion