Defaulting banks - where will it stop?

[Linda Minor]

In my post #111 above, an AFP article suggested the French & Germans want to end Switzerland's status as a tax haven.
Now, Obama is after British tax havens, including the Channel Islands.
Elite power games are, imo, definitely taking place out of sight of us proles:

Joe Guttentag, deputy assistant secretary for international tax in the Clinton administration and a key figure in the Obama campaign, is likely to drive the policy through, along with Professor Reuven Avi-Yonah, who helped frame the act. 'It is expected that something like this will happen,' Avi-Yonah told The Observer. 'There is a sense that if you can raise revenue by doing this, it will not be controversial.'
http://www.guardian.co.uk/business/2008/...-crackdown

Who are these guys?

httphttp://www.oecd.org/speaker/0,3438,e...00.html://

Joseph H. Guttentag
...He was a senior tax partner with the law firm of Arnold & Porter in Washington and Tokyo.
He has been the chairman of the international tax groups of the American Chamber of Commerce in Japan, the U.S. Chamber of Commerce and the American Bar Association.
He was a member of the Executive Committee of the American Society of International Law and served as its Treasurer. He has taught at Harvard Law School and the George Washington University Law School.
He is a graduate of the University of Michigan and Harvard Law School, where he was an editor of the Harvard Law Review.

http://hsgac.senate.gov/public/_files/ST...hUofMI.pdf

"PREPARED TESTIMONY OF REUVEN S. AVI-YONAH, IRWIN I. COHN PROFESSOR OF LAW, UNIVERSITY OF MICHIGAN LAW SCHOOL BEFORE THE US SENATE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, HEARING ON OFFSHORE TRANSACTIONS AUGUST 1, 2006
...No one, including the IRS, has a good estimate of the size of the international tax gap. This is not surprising given that the activities involved are illegal, but one can make an educated guess based on a few publicly available numbers. In 2003, the Boston Consulting Group estimated that the total holdings of cash deposits and listed securities by high net worth individuals in the world were $38 trillion, and that of these, $16.2 trillion were held by residents of North America. Out of these $16.2 trillion, under 10 percent was held offshore (as compared with, for example, 20-30% offshore for Europe and 50-70% offshore for Latin America and the Middle East).5
If one translates this estimate into approximately $1.5 trillion held offshore by US residents, and if one assumes that the amount held offshore earns 10% annually, the international component of the tax gap would be the tax on $150 billion a year, or about $50 billion. This figure is in the mid range of estimates of the international tax gap in 2002 by former IRS Commissioner Charles O. Rossotti ($40 billion) and by IRS consultant Jack Blum ($70 billion).6 As an order of magnitude, an estimate of $50 billion for the total international tax gap (for each tax year) appears congruent with the $3.2 billion actual recovery by the IRS from a single Cayman bank (for multiple tax years)....

e. Sanctions on non-cooperating tax havens.
In the case of non-cooperating tax havens, I support the US Treasury using its existing authority to prospectively deny the benefits of the portfolio interest exemption to countries that do not provide adequate exchange of information.11 This step is necessary, in my opinion, to prevent non-cooperating tax havens from aiding US residents to evade US income tax.
A principal problem of dealing with tax havens is that if even a few of them do not cooperate with information exchange, tax evaders are likely to shift their funds there from cooperating jurisdictions, thereby rewarding the non-cooperating ones and deterring others from cooperation. Thus, some jurisdictions have advertised their refusal to cooperate with the OECD efforts.
However, if the political will existed, the tax haven problem could easily be resolved by the rich countries through their own action. The key observation here is that funds cannot remain in tax havens and be productive; they must be reinvested into the rich and stable economies in the world (which is why some laundered funds that need to remain in the havens earn a negative interest rate). If the rich countries could agree, they could eliminate the tax havens’ harmful activities overnight by, for example, refusing to allow deductions for payments to designated non-cooperating tax havens or restricting the ability of financial institutions to provide services with respect to tax haven operations.
The EU and Japan have both committed themselves to tax their residents on foreign source interest income. The EU Savings Directive, in particular, requires all EU members to cooperate in exchange of information or impose a withholding tax on interest paid to EU residents.12 Both the EU and Japan would like to extend this treatment to income from the US. Thus, this would seem an appropriate moment to cooperate with other OECD member countries by imposing a withholding tax on payments to tax havens that cannot be induced to cooperate in exchange of information, without triggering a flow of capital out of the US...."

Gordon Brown said on PM Question Time last week that he is coming to U.S. next week to talk to both George Bush and to Senator/Pres.-Elect Obama. I wonder if this is what he'll be conferring about.