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huffington postIf government watchdogs -- determined to root out waste, fraud and abuse -- want to go after big game, they should skip chasing nickel-dime welfare cheats, and learn from an IRS foray into Miami's exclusive Art Basel festival -- the annual December event sponsored by Davidoff cigars, Cartier, Net Jet and, of course, banking giant UBS -- where wealthy patrons forge the 'relationships' that will enable them to avoid sharing their hard-earned income with Uncle Sam.
For UBS, sponsorship of Art Basel has done more than burnish the Swiss wealth management specialist's corporate image. It has been an opportunity to make money, and lots of it, wooing clients (perhaps better described as co-conspirators) seeking advice on tax shelters.
It's not just a Swiss thing. As watchdogs get a taste for pursuing tax scams, they are exploring some intriguing findings by the Government Accountability Office. A 2008 GAO study shows that 83 of the top publicly held U.S. companies have set up operations in such tax havens as the Cayman Islands, Bermuda, and the Virgin Islands. In addition, 14 of the corporations with operations in tax-haven countries are beneficiaries of the current $700 billion government bailout, including American International Group (AIG), Bank of America, Citigroup and Morgan Stanley.
The GAO report and the activities of UBS at Art Basel both go directly to the issue of tax avoidance.
A unique combination of events -- the GAO report, the economic collapse, the bank bailout, the pressure to raise federal revenues without hiking taxes, and a series of tax fraud indictments in Southern Florida -- has set the stage for what could become a serious assault on tax shelters, tax havens, tax loopholes, tax evasion, and what are known to economists as "tax expenditures."
For those determined to wring out every drop of "waste, fraud and abuse" from the federal budget, blocking and restricting tax evasion offers the potential of boosting revenues by multiples of billions. One tax break that looks to be a particularly inviting target, for example, allows companies to avoid paying taxes on overseas income until they bring the money back to the US. Obama and others have attacked this break as a federally subsidized incentive to invest abroad. If left intact, this provision will cost the federal government $56.4 billion from 2008 to 2012, according to Congressional tax analysts.
Or take the case of the festivities at Miami's Art Basel, where the fabulously rich spend the tax dollars they have 'conserved' on everything from $1.5 million De Koonings to $1,500 hookers, as chronicled by Conde Nast Portfolio's Jay McInerney.
Until February 19, 2009, when UBS for the first time agreed to release to the US Department of Justice (DOJ) an as yet undetermined number of the names of bank account holders, the closed-door private Miami sessions sponsored by UBS were not just opportunities for people with a lot of extra cash to get tips on hot artists. They were also events where rich people could learn how to avoid paying taxes altogether.
Read more:
http://www.huffingtonpost.com/2009/02/23/gimme-shelter-tax-evasion_n_169084.html
i am hopeful. But powerful people are gonna get their power panties in a knot.
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