Non-disclosure or secrecy is fast becoming the new competitive advantage for US-based International Financial Centres. Early indicators show that money exiting reformed secrecy jurisdictions, like Switzerland and the Cayman Islands, is heading to US tax haven-states, like Nevada and South Dakota. The attraction lies in the several public assurances made by US officials that the IRS is not about to comply with international disclosure rules if they do not want to.
Of course, the the US has a legitimate concern, and it is one shared by other countries. However, only the US may be given licence to act on its fears. The concern is for the welfare of tax-payers whose information is exchanged with countries whose confidentially record fall short of US standards. As a result such exchanges may expose these taxpayers (and their families) to extortion, kidnapping death and other unintended consequences of the exchanges.
In some cases these…
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