Opens in a new tab

Switzerland rejects new tax on rich; IRS ends legal challenge against Swiss bank

November 30, 2010

Congress is getting ready to debate whether the United States' wealthier residents must pay higher taxes.

Hotels in mountains covered with snow, Klein Scheidegg Ski Area, Eiger Peak, Switzerland

But in Switzerland, that issue has been decided. The rich don't have to pay more taxes.

On Sunday, 59 percent of Switzerland's voters rejected a proposed 22 percent tax on residents with annual income of more than 250,000 francs, or just a little over $249,000 in U.S. dollars at today's currency exchange rate.

Opponents argued the minimum national tax would have interfered with the tax independence of Swiss cantons, the nation's equivalents of states.

Now, and for the foreseeable future, the cantons set their own rates. That means the 26 jurisdictions likely will continue what the Wall Street Journal's Wealth Report describes as a race to the tax bottom to attract more rich people and businesses.

And oh yeah, the tax would have made Switzerland less attractive to to the world's wealthy.

IRS ends legal action against Swiss accounts: The anti-tax vote comes on the heels of the IRS' decision to end its formal efforts to force the Swiss national bank UBS to disclose even more names of American account holders suspected of offshore tax evasion.

A federal court in Miami had issued on behalf of the IRS a summons seeking the identities of additional suspected tax dodgers. 

But the agency decided that the legal tactic was no longer necessary since Switzerland agreed, on behalf of UBS, to turn over to the IRS the names of about 4,500 American clients of the bank.

In addition to those accounts, around 15,000 other foreign account holders voluntarily acknowledged their holdings during a special IRS offshore amnesty. Those individuals agreed to pay back taxes and penalties in exchange for not being prosecuted for tax evasion.

And while the Swiss chapter of hidden U.S. tax money might be over, the IRS says it is ramping up scrutiny of other banks where the rich might be sheltering income.

In a brief telephone interview with the New York Times, IRS Commissioner Douglas H. Shulman said that the agency has "additional cases and banks in our sights right now," but he declined to provide details.

Related posts:

Want to tell your friends about this blog post? Click the Tweet This or Digg This buttons below or use the Share This icon to spread the word via e-mail, Facebook and other popular applications. Thanks!

Share:

The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

Latest Posts
How to avoid being haunted by ghost tax return preparers

October 28, 2026

Some ghosts this Halloween are cool trick-or-treaters. But when it comes to taxes, beware of…

Read More
TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
Leave the first comment