Things are bad all over. Writers for The Wall Street Journal have retreated to their international gold- and lead-lined bunkers, from which they are writing articles in defense of tax havens. The usual suspects Sens. Carl Levin (D-Mich.), Bryon Dorgan (D-N.D.), and Max Baucus (D-Mont.), plus Treasury officials, are trying to snag tax money from some American companies that are incorporated and operate outside the United States. As things currently stand, these companies can defer U.S. taxes on money earned overseas until it is brought into the United States.
This is the government equivalent of scrounging in the couch cushions for change…at someone else's house. But hey, they need the money, right? That part at least sort of makes sense, although it will discourage certain useful kinds of reinvestment in firms that function abroad and have other negative consequences for people who really need financial privacy in the face of corrupt and kleptocratic governments. But then there's this:
In addition to charges of tax evasion, some members of Congress—echoing European politicians including France's President Nicolas Sarkozy and British Prime Minister Gordon Brown—have even tried to scapegoat the low-tax jurisdictions as somehow being responsible for the global recession. They are demanding that the G-20 countries come up with action proposals against them at their meeting next month.
There are a lot of people to blame for what happened with the economy, but Switzerland's privacy regulations and Bermuda's tax policy probably shouldn't be anywhere near the top of that list.