What a Relief!

I commented, a while back, that this alleged IRS attack on the Swiss bank accounts of "rich American tax dodgers" was, in all probability, a hoax. Why should the Swiss, of all people -- notoriously independent and "neutral" -- roll over for a bunch of green-eyeshaded geeks at the IRS? I mean, the IRS might strike fear into everyone in this country, but overseas? I imagine they're regarded as just one more instrument of oppression. At any rate, I'm happy... er, sad... whatever... to announce that my suspicious have been confirmed. And this is based on the supposedly earth-shaking announcement that "a deal with Switzerland settling U.S. demands for the names of suspected tax dodgers from a Swiss bank" has been made... and said tax dodgers are scuttling about like Lower East Side cockroaches when someone turns the kitchen light on at 3 AM.

But! Consider the actual amounts involved. The IRS is standing up, proud and tall, and saying that it anticipates recovering tax money on $15 billion in assets from 52,000 people. Notice I didn't say $15 billion in taxes -- just taxes on $15 billion in assets. And this is from 52,000 people?? So -- excuse me for just a moment. Ah yes, that works out to... drum roll, please... all of $288,000 in assets, on average, per alleged tax dodger. Hell, we're not talking about "the rich" here, or even "the wealthy" -- we're talking, at best, upper middle class -- well, maybe the upper upper middle class, i.e. the ones who were smart enough and resourceful enough to open Swiss bank accounts in the first place. So let's say, just as a "f'rinstance", that the IRS "outs" every one of these characters and collects the max on each of their Swiss accounts. That, given that the amounts would be taxed at the rate of 33%, would net the IRS a cool $5 billion. Not exactly chicken feed, but how much do you suppose they've already spent on investigations, audits, and lawsuits tracking this money down? A good chunk of that $5 billion, I'll bet. (One clue is that Obama wants Congress to pony up the money for 800 (!!) additional agents, examiners and lawyers to continue the anti-Swiss bank crusade.) But you know how the IRS works -- or maybe you don't. They have no problem at all spending $1000 to net an extra $100 in taxes... because, as always, it's not about the bottom line at all, but about jobs. And power.

Plus -- sweeping aside all these small fry, what about the truly rich who have been stashing money in Switzerland for decades now? Apparently they're going to remain untouched. I mean, that $15 billion is chump change for them; it's barely enough to cover one week's taxpayer-funded bonuses for AIG. So once again, the usual hoax is being played out -- a few chumps at the bottom of the top layer are going to be peeled off, and sacrificed to the IRS gods, and the rest are going to go on their merry way. 'Twas ever thus. The worst thing you can do is be semi-rich -- i.e. have enough money to be called "rich" by the likes of Bill Clinton or Barack Obama (or a "kulak" by Joseph Stalin), but not nearly rich enough to avoid the logical consequences of being considered rich in a collectivist society with a confiscatory tax system. So there's really no sense at all in being half-rich, and I highly recommend against it, even if you might be able to afford the down payment on a McMansion in Great Falls, Virginia. But in the long run, it's more trouble than it's worth.