Germany, the United Kingdom and Austria, are about to ratify the agreement signed with Switzerland to impose a one-time tax in all deposits of citizens with tax base in such country with accounts on Swiss banks. The deal provides that the Swiss authorities will deduct from all such accounts of citizens of the countries participating in the agreement 40%, which will be reimbursed to the governments of the respective countries correspondingly. Furthermore, Switzerland will tax dividends every year with 22% which will be also reimbursed to the countries, accordingly.
Such one time tax will be raised only from the accounts that they were not declared in the respective national authorities. Switzerland, is securing Swiss banks depositors that the names of the account holders will never be revealed to the national or other authorities while the remaining money (after the deduction of the 40%) will be legitimised and "clean" before any and all authorities. In this way, with the payment of a one-time 40% plus 22% per year tax on dividends, all money held by Germans, British and Austrians in Switzerland will be "washed," regardless of origin (i.e. bribes, drugs, prostitution, etc.). Holders of the undeclared, will keep the balance (60%) and will be reinstated as honourable members of the western European society as they will benefit tax amnesty granted to all who will suffer the 40% hair-cut. Convenient, yes very, yet not cheap.
Italian Prime Minister Mario Monti, is about to proceed with a similar arrangement for Italy while Greece, in spite of the pressure of certain influential businessmen in monopoly sectors of the economy. Monopolies in Greece are responsible to a large extend for the current crisis which mathematically will lead the country, highly likely before the end of this year, to bankruptcy and exit from the Eurozone, unless a "big bang" materialises before.
Greek monopolies include milk and dairies, cement, construction materials, land, maritime and air transports for merchandises and passengers and over 1,000 close professions that no government dare to touch.
Luxembourg, suggested to enforce the same provisions for bank accounts in all 27 Member States but the proposal seems a kind of a futile exercise as in all bank accounts in the Eurozone the origin of the money is meticulously checked by the beneficiary banks and thus the majority of deposits are clean and legitimate.
This arrangement generates questions. What kind of credible guarantees will the Swiss provide the money-receiving governments that they will get the entire amount of the 40% withhold tax on their citizens? Indeed, since no names will be given, such a guarantee cannot practically exist. And how to trust the Swiss government when the British government was responsible for fixing LIBOR for years affecting trillions of transactions all over the world? Furthermore what guarantees will be provided to bank clients that what ever will be left in their account after the cuts will be considered legitimate in their own country and how this legitimacy will be proved? By a Swiss bank statement?
And, if the money laundering tax amounts to 40% why all or some of the 27 Member States do not grant their own Tax Amnesty directly with a minimum tax, ie 10% or 20% on repatriated capital hidden in Switzerland or elsewhere?