Yesterday, the Swiss bank UBS announced that it was turning the names of 4,450 American account holders over to the IRS, in the culmination of a three-year IRS investigation into UBS’ work helping wealthy Americans evade taxes. These accounts contain an estimated $18 billion in assets, and as the Guardian noted, the move is expected to “reveal the secretive world of international wealth management in which complicated webs of sham trusts and shell companies are created in tax havens to protect the assets of the super-rich.”
I wrote yesterday that UBS’ acquiescence is a victory for the U.S., and a small first step in the much larger fight against tax evasion. But CNBC’s Michelle Caruso-Cabrera did not see it that way:
This is a terrible terrible thing that has happened today. You may think this is about rich tax cheats, but no matter what your income is, your taxes are lower because of tax havens and they help prevent tyranny by corrupt governments.
Watch it:
It should come as no surprise that the same network that repeatedly and vigorously went to bat for bailed-out bankers and their million dollar bonuses is now carrying water for wealthy tax evaders. But Caruso-Cabrera (despite her claim that she does not condone tax evasion) seems to think that the best way to force a change in tax policy is to have people avoid paying on such a large scale that the government resigns itself to lowering the rate.
There can be a legitimate debate over whether U.S. tax rates are too high or too low, but that doesn’t change the fact that there is a tax rate on the books and it’s against the law to avoid paying it. Tax evasion simply shifts the tax burden onto the law-abiding citizens and companies who don’t hide assets or set up sham subsidiaries in the Cayman Islands:
Over ten years, an estimated $1 trillion in revenues is lost due to the use of tax havens and the government must make up for this shortfall. This diversion ends up being shouldered by other companies and taxpayers and is transferred as higher debt for future generations…The $100 billion annual burden of these tax havens impacts every state in the union.
So does CNBC honestly think that tax evaders are doing their patriotic duty by dumping their tax burden onto everybody else? Are countries like Sweden, Austria, and the Netherlands tyrannical due to their higher income tax rates? Earlier this month, CNBC labeled unemployment benefits a “fraud,” but when faced with actual tax fraud, the network defends it.
