US Congress has tax havens in its sights

A draft bill has been brought before both the United States Senate and House of Representatives with a view to targeting tax havens such as Switzerland.

Responsible for the bill are Lloyd Doggett, a Democratic congressman from Texas, and Carl Levin, a Democratic senator from Michigan who is also chair of the Senate committee that will haul UBS’s business practices over the coals midweek.

UBS, Switzerland’s biggest bank, has been haunted by a US investigation that accused it of helping wealthy Americans illegally evade $200 billion (SFr235 billion) in taxes. In February it was forced to pay $780 million in fines and hand over some confidential client data.

But the deal has not completely satisfied the US tax authorities, who have demanded secret data on 52,000 further UBS clients.

In February 2007 Doggett and Levin, along with the then senator Barack Obama, introduced the Stop Tax Haven Abuse Act, comprehensive legislation to stop offshore tax haven and tax shelter abuses. They cited $100 billion in revenue drained from the US Treasury at the expense of “honest, hardworking American families who pay their fair share”.

The bill proposed on March 2 includes a provisional blacklist of 34 countries, including Switzerland and Liechtenstein. Switzerland’s appearance on any actual list would have far-reaching consequences.

US companies in Switzerland for example would no longer enjoy attractive local tax rates.