It definitely worked great for a lot of dictators, tax cheats and the sort… I think Switzerland is a great example of why complete privacy isn’t fair on ordinary taxpayers - it allows the ultra-rich to hide what they owe
The ironic thing is that one of those new hot spots, in addition to the usual suspects like Cyprus, the Caribbean, etc., is the USA. See https://www.washingtonpost.com/business/interactive/2021/wyo... for some juicy details.
Of course, privacy enabled the bankers to do shady things, but this wasn't the initial motivation. Swiss people value their privacy overall.
That said, yes, dictators and such were - and are - a problem. They aren't going to prosecute themselves, after all.
By the way, one of the top places unsavory types stash their cash is the US. FATCA is a one way street: US banks don't provide information on their international customers.
The problem was - and this rightfully pissed off a lot of countries - that Switzerland makes a distinction between tax evasion (you "forget" to mention those 5'000 franks extra income) and tax fraud, where you actually cook the books.
Tax evasion is not considered a crime and if you're caught you get fined and pay back taxes. Tax fraud is a crime and may land you ion jail.
So, in case of simple tax evasion a third country may not get the information requested since this is not a crime in both countries, which is a requirement for this.
With the automatic information exchange with other countries Switzerland is no more a prime destination to hide your illicit gains.
https://www.theguardian.com/world/2019/nov/14/the-great-amer...
> A South Dakotan trust changes all that: it protects assets from claims from ex-spouses, disgruntled business partners, creditors, litigious clients and pretty much anyone else. It won’t protect you from criminal prosecution, but it does prevent information on your assets from leaking out in a way that might spark interest from the police. And it shields your wealth from the government, since South Dakota has no income tax, no inheritance tax and no capital gains tax.
Make it completely legal and tort-free to lie about social security numbers anytime, anywhere, except when dealing directly with the government (i.e. filing your taxes).
That'll stop them being used, and right quick.
As a result, we have processes that ask for or require a social security number that aren't even related to the purpose for which it was created: Health care, loans, debt collection.
Notably, some citizens of certain religious sects, like the Amish, do not have social security numbers.
Some combination of name, address, birthdate, etc.
But the problem isn’t using the SSN as a semi-unique ID. It’s using it for that and also assuming it’s secret. SSN shouldn’t be any more secret than name or address (and shouldn’t be used to unlock or access accounts).
Plenty of countries have SSN-like numbers: https://en.wikipedia.org/wiki/National_identification_number
It's really not that special.
> But the problem isn’t using the SSN as a semi-unique ID. It’s using it for that and also assuming it’s secret. SSN shouldn’t be any more secret than name or address (and shouldn’t be used to unlock or access accounts).
Of course. Shouldn't it be trivial to sue any institution that uses SSN as a way to confirm your identity?
You’d think, yet here we are, with one of the big three credit agencies letting people steal/resteal accounts with nothing more than some public info.
*: except judges and juries, apparently
I've seen it more than once when working with health records: two people have the exact same SSN, but different sex. If I need to match records, I'll use SSN and birthdate, knowing even that's not immune to errors.
Fun story: many years ago, I worked on some consumer tax prep software. Specifically because of the Amish, the SSN field was optional. Imagine that - an Amish person using tax prep software.
While the government says that an SSN is not necessary to open a bank or credit card account, all the ones that I’ve encountered require it to proceed with the application, and the government doesn’t do any enforcement of that.
> Around 36 percent of the Swiss own their homes or apartments, the lowest rate in the West and well below the 70 percent average in the European Union, and the 67 percent in the United States. [1]
I’m sure there are many factors, but I would be less willing to finance someone’s large purchase without more information about their creditworthiness.
[1] https://www.nytimes.com/2023/11/06/realestate/zurich-switzer...
I live in Switzerland, where this is the case. Even the government doesn't get this information. If the government thinks you're cheating on your taxes, they have to use warrants and follow the same procedures as for any other crime.
The only financial records accessible are records of legal debt collection actions ("Betreibungen"). Before offering someone credit, you can find out if other people had to sue them to collect.
Yet, even with so little information - without credit reporting agencies - everything works just fine.
FWIW, due to international pressure (things like FATCA), Swiss law was changed so that banks do report on international customers.