There are some people, perhaps many, who think that, if it's not against the law, then whatever they want to do is legal. Certainly, George W. Bush and Richard Bruce Cheney tried to make that argument, when it came to approving of the torture of alien detainees. But, they were doubly wrong because as agents of government they had to meet a higher standard and do only that which they were specifically permitted to do by the Constitution (beating the crap out of people isn't).
Also, while, as any ordinary bloke, Bush/Cheney could spy on their neighbors, as long as they didn't get caught and sued for invasion of privacy, as agents of government, they were prohibited from doing electronic home invasions without getting special permission from a court.
All of which is just to say that the obligations of individual citizens and agents of government are different and individual actions have to be defined as crimes to be considered illegal.
Which is why the just signed treaty between the U.S. and Switzerland is important.
It makes clear that while evading taxes in Switzerland is not a crime, Americans doing as the Swiss do in Gstaad is against U.S. law and, as soon as the treaty is ratified by the U.S. Senate, Switzerland is going to help Americans obey.
I expect that the "Obedience to the Law is Freedom" people aren't going to be too keen to have evading taxes affirmed as a crime, but it seems some people need a law to make them do the right thing.
Anyway, the Wall Street Journal reports:
WASHINGTON (Dow Jones)--U.S. Treasury Secretary Timothy Geithner on Wednesday signed an updated taxation treaty with the Swiss government, a move the U.S. hopes will help it combat offshore tax evasion by U.S. citizens.
The treaty, signed by Geithner and Switzerland Ambassador Urs Ziswiler, provides the U.S. Internal Revenue Service with greater access to information on U.S. account holders at Swiss banks. However, the U.S. must be able to clearly identify the suspected account holder, along with the Swiss bank, according to details the Swiss Finance Ministry released earlier this week.
Another new provision in the treaty would ensure that U.S. holders of individual retirement accounts that include Swiss companies in their portfolio won't be taxed until the income from that account is distributed. A Treasury official said pension funds are already exempt from withholding taxes, and the revised treaty would extend that treatment to IRAs.
The treaty, effective from Wednesday, is still subject to a lengthy ratification process that includes a review by parliament and interest groups such as business associations. It must also be ratified by the U.S. Senate.
This comes on the heels of the IRS amnesty extension to October 15, making it possible for individuals to report their hidden assets voluntarily and pay what's owed without additional penalties or being prosecuted for a crime.
But, as the Wall Street Journal article points out,
Despite the symbolic importance for Switzerland, some observers questioned how much the strengthened agreement will add to the ability of the U.S. to catch tax evaders.
"In light of the UBS settlement, the treaty is almost superfluous," said Asher Rubinstein, a partner in the law firm of Rubinstein & Rubinstein.
While the treaty requires the U.S. to provide specific information about suspected tax evaders in information requests, a John Doe summons can be used by the Justice Department without any information on individuals. "The U.S. doesn't need the treaty if it can just issue another John Doe summons," Rubinstein said.
It may not be necessary to have a treaty, if behavior can be coerced. On the other hand, treaties with other countries are really the polite way to go and having the law clearly spelled out provides an incentive for people to comply.
And, really, government by the people only works, if the vast majority are supportive of the rules and regulations and voluntarily do their part by paying taxes for services they have neither the inclination, nor the skills, to provide themselves. It used to be said that government does what people can't do for themselves, implying a certain level of incompetence. It probably would be better stated as "government does what people prefer not to do for themselves."
Of course, that casts government into a service provider role. Which may not be what some of our public officials have signed on for and might explain why conservatives, in particular, appear to be out of step.
Anyway, when government 'r' us, then it's really a "do it yourself" endeavor and paying taxes is everyone contributing their fair share. Voluntarily is good. But, some people need a nudge to make it all run like a Swiss watch.