Posted on 02/20/2008 7:16:53 AM PST by BGHater
Liechtenstein accused Germany yesterday of attacking its sovereignty after Berlin admitted using spies to investigate tax fraud in the principality.
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Crown Prince Alois launched his withering tirade after it emerged that German undercover investigators paid up to £3.75 million for bank details of Germans suspected of tax-fraud in the nearby state.
"Germany has clearly failed to understand how one behaves towards a friendly state," he said.
"We want good relations with our neighbours but we are also a sovereign state."
He said Liechtenstein would "protect our citizens and also our investors, who trust us, against such methods of investigation".
The German tax inquiry has already claimed one high-profile scalp with the resignation of Klaus Zumwinkel, the head of Deutsche Post, who is now under arrest.
But up to 1,000 other leading business figures from the European Union's biggest economy are also suspected of spiriting away hundreds of millions of pounds from the German tax authorities and depositing them in banks in the 62 square mile principality, sandwiched between Switzerland and Austria.
The tax investigation has stirred up deep resentment in Germany against a business elite accused of earning huge, untaxed, sums while many struggle to survive.
The finance minister, Peer Steinbrück, has already dismissed those under investigation as "greedy". In the past Germany has demanded greater clarity in Liechtenstein's financial affairs.
But Crown Prince Alois said it was Germany's complex financial system that needed to be overhauled.
"Germany will not solve its problems with its taxpayers by attacking Liechtenstein," he said.
"Germany has the worst tax system in the world."
The rumor mill said that on President Clinton’s many trips he was negotiating tax agreements and extradition policies with other nations. Does anybody know about that?
It’s an old topic; the only difference is now with the harmonization of the EU (access to information) and the German tax authorities clamping down such stories bubble up. When Germany passed their capital gains tax years ago, Lichtenstein and Luxembourg became tax shelters and made billions as people were rushing their money out of Germany. It's one of those great side effects those preaching all the worlds problems can be fixed with another tax and government program didn’t foresee.
The US have cleared their positions with liechtenstein earlier on - US citizens could not use the same obscuring tactics that liechtenstein offered to the german pepper bags because of bilateral agreements.
In general I can see that US tax authorities have more of a punch then the germans.
Now that germany is awke, it will demand the same deal from liechtenstein.
I don’t see much changing. The 900 potential cases for the Germans, which might result in $1 billion in fines and previous taxes...might not be so easily won in court. The EU is strangely silent...and they might question paying off a guy for stolen data...which is from 2002.
The search warrants? Fascinating thing. The Germans know that thousands of folks have done the tax game since 2002...so they went and checked out the companies and lawyers in Germany who were fixing up the “foundations”, and are doing the search warrants first at their places (Frankfurt is amongst the big places). As for private home residences...well...they admit they are doing 20-25 search warrants per day...and it may take a month before they finish this (they started late last week). So you can figure that every one has shredded their documents over the weekend...companies and private individuals. So the cases are going to have limited resources...which the politicians really prefer (one would think).
How much is at stake? Smart German tax lawyers are now saying that $44 billion in income is hidden by Germans outside of the country, with Liechtenstein getting about $8 billion of this for their banks. Think about that amount of money...hidden away...and the big wigs in Germany refuse to admit it. They aren’t going to happily agree to any of this episode.
As for the guy who sold the CD with names? He is living in Australia, as we learned this week. And the Liechtenstein folks are looking for him. I’m guessing that some Russian mafia guys are hired and will be performing some payback. For other bank players who want to defraud Liechtenstein banks in the future...this guy will be made an example of...my humble bet. German press says the guy is asking for German protection and the BND hasn’t agreed to doing that part...they paid the $5 million and thats as far as they want to go.
The next shoe to fall that folks will be interested in....will be the 899 other names on the list. The German public expect politicians, singers, stars, soccer players, promi’s, and even TV moderators to be announced.
$1billion in taxes - that’s very optimistic - The estimate to have a volume of 300 million € and maybe they can’t get it all.
German pepper bags money is spread around the world - and that’s maybe not even bad given the catastrophic management some of our banks showed recently.
So it’s not going to get any more complicated to hide the money. Even if our government strangled this particular bank in Liechtenstein - as an investor you could any time move to Belgium (Where I live that would even be more convenient for my office) and live there for more then 185 days a year - é voila I am an expat living in Belgium: My wealth would be taxed under Belgium law which says I don’t even have to raise my foreign revenues to authorities. Then there’s caiman islands and channel islands, Austria and Switzerland ...
We need to get a grip on that - the exponential growth of private assets IS a problem - mathematically the difference between a states budget and private owned money gets smaller every day and faster smaller every day (it’s so to say exponential ;-) so one day we might end up with something like a kingdom of wealth where you can only be rich if your grandparents started investing.
That’s also why I believe that inflation is going to increase over the next time and some rather crude and silly stuff might happen.
No, I don't know anything about that, but, as usual, I am willing to take a wild guess.
I think WJC was simply doing the leg work in advance of someone needing to seek refuge in a foreign country.
On our dime.
Our country (U.S.) has been inflating our dollar to a shameful degree for many years.
I agree that something will happen eventually, and it won't be pretty.
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