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Lifting the Shadow Off the Tax System

The fact is that it did not happen until Barack Obama became president. It was a standing offense to American tax justice that probably hundreds of thousands of our very rich countrymen brazenly avoided the reach of the Internal Revenue Service simply by transferring (much of) their wealth to foreign banks in Switzerland and about 15 other countries, which protected the identities of these depositors by their laws.

We know why this long-time structural injustice was of no interest to either of the Bush administrations. Let's say roughly that both George H.W. and George W. didn't see anything wrong with making off with cash sans tax anyway. So this is an issue that probably never occurred to either one of them. Doubtless, they also had many friends who availed themselves of this illegal liberty.

Why was this not on Bill Clinton's radar? For more or less the same reasons, I would venture to say.

In any case, the Obama administration is the first one in decades to ponder the meaning of social justice and to have in that meaning the idea and ideal of equality. The proposed health care reforms are animated by Matthew Arnold's injunction to "choose equality and flee greed." Their opponents seem to be indifferent to the fact that, without structural revisions of our medical system, millions and millions of Americans will be relegated to emergency room care, to which the last Bushie so happily relegated them.

What has transpired is that the U.S. and Switzerland have come to an agreement according to which the old Union Bank of Switzerland, now U.B.S., will turn over the names and records of 3,500 of their largest American customers. This is not the actual 52,000 depositors that some of us had come to anticipate. But it is a huge step forward. And the I.R.S. will not be indifferent to the rest or to the relationships of other Swiss banks with other tax-rogue Americans. If I were this sort of tax-rogue, I would not for a minute count on being able to fool the authorities anymore.

Of course, there are countries that play host to tax-avoiding Americans and the same sort of denizens of other jurisdictions. Hong Kong, for example. And elsewhere in Europe and the Caribbean.