You are here

UBS and IRS reach an "agreement"

Yesterday my colleague at CEI, John Berlau, released a statement about the recently announced deal between Swiss bank UBS and the IRS.  It is being reported that the bank may end up turning over at least a portion of the over 50,000 names just to get the U.S. off its back.  As it seems, any agreement reached in this case will be the result of UBS being bullied by the IRS to divulge its customers names simply because it says so.  The potential slippery slope is evident.  In this scenario, the Federal government can persuade foreign companies to ignore the laws of their home nations basically by force.  Berlau makes the point that I have  been making in all of my blog posts on this issue, that advocates of civil liberties:
"should be alarmed by the U.S. government's sweeping disregard of privacy interests in its demands to the Swiss"
These actions by Federal authorities are setting a bad precedent for the privacy of American citizens.  When the government can demand to know every detail of your financial life, what is there to stop it from exerting control over it? In addition, as I have said in past posts (and here), the disregard for the sovereignty of fellow nations exhibited by these demands is also concerning.  I agree with Berlau in his assessment that being in a similar situation, the U.S. might not be so willing to allow American companies to ignore its laws in order to acquiesce to another nation's demands. If  UBS stood firm by making an agreement that doesn't violate Swiss law or the privacy rights of those U.S. citizens,  maybe long-standing privacy protections will hold up for now.  But it is doubtful this is the case.  It is more likely that UBS has capitulated, at least to a degree, and the slope begins to slide into scary territory.  Unfortunately, some will frame this in class warfare terms, and declare that we should have no sympathy for folks with secret Swiss bank accounts.  Because its unfair, accordng to the feds, that they are cheating and getting out of paying taxes like the rest of us have to.  Except for the fact that we don't know if that is completely true, and maybe the question we should be asking is whether the taxes we pay are fair at all.