Swiss banking secrecy and the problem of international cooperation in tax matters: A nut too hard to crack?

Abstract

How was Swiss resistance to international cooperation in tax matters overcome? This article argues that while Swiss banks are structurally dependent on access to the United States (US) financial market, Switzerland is structurally dependent on the economic welfare of its largest banks. Taking advantage of a tax evasion scandal in the midst of the global financial crisis, this indirect dependence gave US law enforcement authorities the opportunity to exercise pressure on Switzerland by threatening to criminally indict Switzerland's largest bank. The tax evasion scandal and subsequent Swiss concessions to the US had two important consequences for international tax cooperation. First, the scandal provided a focal point for collective action that allowed other countries to coordinate their strategies and direct them against the country that had been identified as uncooperative. Second, the scandal undermined Switzerland's ability to impede collective action because the bank's public admission of wrongdoing demonstrated the necessity of international tax cooperation.

‘Tax the rich’? The financial crisis, fiscal fairness, and progressive income taxation

“…The contribution of my article is threefold. First, the article speaks to a growing body of literature that finds new trends in the politics of taxation since the financial crisis (Emmenegger, 2015;Hakelberg, 2016;Hakelberg and Rixen, 2018). Whilst most of the literature focuses on the causes and consequences of novel forms of international tax regulation (like the Automatic Exchange of Information (AEOI)), my article adds the domestic dimension to these studies.…”

The redistributive impact of hypocrisy in international taxation

“…A finance curse scenario is equally possible(Christensen et al 2016). 2 For in-depth accounts of the causal link between FATCA and multilateral AEI, seeEmmenegger (2017),Hakelberg (2015b), andPalan and Wigan (2014). 3 See Hakelberg (2015b) for a discussion of the double messages the US Treasury Department sent to foreign governments and the American financial industry on reciprocity.…”

Is Panama Really Your Tax Haven? Secrecy Jurisdictions and the Countries They Harm

“…Hakelberg and Schaub (2017) examined the case of the USA which successfully coerced smaller tax havens into an information exchange regime, while abstaining itself from participation. Steinlin and Trampusch (2012) and Emmenegger (2017) focused on the development of banking secrecy and information exchange in Switzerland; Hakelberg (2015) argued that the rules for the exchange of information imposed by the US on Luxembourg and Austria played a fundamental role for the eventual adoption of the EU-proposed scheme by these two secrecy jurisdictions. Miethe and Menkhoff (2017) analysed the effect AIE relationships have on banking deposits in tax havens and others.…”