— The largest cash note is 1000 Fr. (slightly more than $1000). It is readily accepted everywhere and I can pay for coffee with it and get change. (The coffee will be around $4, or $7 for vanilla latte in Starbucks).
— My ATM daily cash withdrawal limit is 75000 Fr. (not a typo). I dream of hitting it once, but I'm not that rich.
— I can go to the nearest bank and buy a physical gold bar, from 1g to 12 kg, for cash, no questions asked, no papers needed. And sell it later at the same place, with only a nominal fee taken (if still in original package).
And I like it this way. When I travel in any other country, it looks strange to me when even a 100€ bill is frowned upon and probably won't be accepted.
It's a bit snarky, but tax payers around the world are thankful for having to pay additional taxes for your privilige. In the sense that the freedoms you enjoy financially in Switzerland have enabled massive tax-dodging worldwide.
Half a million worth of gold, no questions asked? Anti-terrorism-financing acts in Europe start with actions needed by banks and institutions at about 10-20k euro per transaction. Again, I would be among the first to doubt the use of these kinds of acts (does it stop _anything_?). But the tax dodging for one has been a real consequence of Swiss law. It's kind of where the libertarian in me meets the tax payer.
I am sorry, but the modern global tax system is a mess and I don't want to support it in any way. I have to pay quite a lot of taxes and social payments here (contrary to a popular myth, Switzerland is quite tax-heavy for small businesses, and we have obligatory medical insurance, quite expensive), but at least, most of them were voted in directly on referendums, and a lot more were repelled by voters who are also taxpayers.
In most other countries, governments are free to issue new tax laws and amend old ones at their wish, without democratic validation. And the only feedback is the promise of candidates to fix things in the next 4 years, which they rarely fulfill.
> In most other countries, governments are free to issue new tax laws and amend old ones at their wish, without democratic validation. And the only feedback is the promise of candidates to fix things in the next 4 years, which they rarely fulfill.
In the US at least, the tax system is the way politicians can reward their contributors in the most straightforward manner. New, arcane deductions directed at individual companies or groups of companies make for a very complicated tax system. Politicians have no incentive to change it, and we have not elected a person who has a philosophical hatred of it.
I'm not sure you can say the decisions of one country "enable" crimes in another quite like that. The Swiss approach to tax and financial privacy isn't unreasonable, and if other countries require global cooperation to enforce their tax systems, then isn't that more of a design problem on their end?
Exactly. It's very similar to the encryption debate right now. But there should be a right to privacy regarding in which back I put my money after taxes were payed on it and the total amount of money is declared.
The main issue I always saw with the banking secrecy laws that we would store money for people like gaddafy and other rogues. That we should have stored much earlier by law.
All banks, including Swiss banks, now require client identification first (no more "numbered accounts"), and they are disallowed to open accounts for some categories of people.
Also, for several reasons, it is no longer possible for a US person or organization to open a Swiss bank account. This is a pity, and quite inconvenient for US expats working here, but at least fine taxpayers of United States no longer have to worry about somebody dodging their taxation using Swiss banks, at least directly.
Exactly. And that's what this whole crackdown on Switzerland was all about. Not about stopping tax evasion or people hiding money, but about the US lobbyist profiting instead. At no point was it about justice.
Bingo! It is about keeping the money inside the country. It's not just the US. The German authorities even went so far as to offer and pay money to whistleblowers/thieves with CDs full of customer names. It looks like an economic war.
>but tax payers around the world are thankful for having to pay additional taxes for your privilige.
Those tax payers should be thanking their law makers who allow for entities within their jurisdiction to make use of laws elsewhere to avoid local laws.
Ugh, it sounds nice but it's just one side of the story. ATM limits are generally not in place because you can't access your money, but to protect the consumer from being forced at gunpoint to withdraw their entire balance to a thief. Through my work I've got eyes on a lot of people's bank accounts and I've seen plenty with balances of tens of thousands of dollars on their checking account. The ability to withdraw it with no oversight or protection with your card means walking around with your card means you're walking around with your entire bank balance in your wallet, ready to be stolen by anyone who forces you to withdraw, or simply reads your code and steals your card or skims your card. Same for companies rejecting bills, sounds ridiculous in a rich low-crime country, but you don't live in the 'real world' that the median citizen of the world does, you live in a tiny little paradise in comparison. In most other places, retailers don't want to hold that kind of cash in stores, it's dangerous to them.
The gold is great, although it makes little sense for every bank in the world to hold gold. One or two dealers per city is fine, and guess what, they exist already and they don't have to be a bank. I really do like it, though, would definitely like it but I don't think it makes much business sense. Beyond that, it's reasonably easy to simply get exposure to the gold price as investors. The only reason to buy physical gold then is either because you're pretty paranoid about the 'system' collapsing, which is fine although not my cup of tea. The other is for tax avoidance. Let's just say I don't think it's a coincidence this service is offered in Switzerland, and that this may tell you something about the real use case of this service. It may work in a rich country with a finance industry that brings in big bucks, but Swiss policies simply don't work at scale in other countries, and have indeed cost other countries a lot of money who are in a way subsidising Switzerland. (I know because I've worked in that very industry and I've seen how it works. Although I must note, it's certainly not the only country to do this, and it's all changing for the better pretty quickly).
Anyway thanks for sharing your personal experience, I'm sure you know the above and aren't claiming Switzerland is some kind of model for the rest of the world, but that's what it appears to suggest.
What we want from "the system" is protection from seizure. Swiss banks cannot guarantee this protection anymore, because if I am, say, a German citizen they will now happily report my bank accounts to German tax authorities due to recent agreements, and they will seize my money, even if they are mistaken, before court decision, with no presumption of innocence. (Ironically, they are explicitly disallowed by law to do it for Swiss tax authorities).
If I have physical gold, it's anonymous, can be stored securely and is not transparent. Still can be seized, but this is much harder and requires actual physical force.
I get what you mean, I've been on the receiving end of a tax bill that was 10x my actual bill. Indeed I had to pay first, then object, then get my money (without interest) back. It sucks, particularly as I really couldn't miss that money at the time, I actually paid them with debt and paid back my debt once they fixed it.
But perhaps you may already see why gold doesn't change that equation much. After all, take my experience as an example, I didn't have money to pay them, nor did I have credit on my bank balance (I didn't borrow through there). So there was no way for them to actually seize my money from my bank. A bit like having gold and withholding it, they can't seize anything from me, is this a solution?
No. After all, I was completely fucked if I didn't pay. Interest incurs on taxes due (quite a steep rate at that), plus penalties accrue on non-payment (super steep). In addition, at some point you get issues with the justice system. If then it appears you were withholding some gold, you're completely fucked. Now you're paying extra penalties for tax avoidance, which may be criminal depending on the magnitude. You say it requires physical force as if that's some kind of benefit, no way, you're life is screwed when it comes to that. You'll be heavily fined, may get jail time and may have a criminal record, as well as extra scrutiny on your taxes for the rest of your life.
If the government uses force on you by seizing your assets, the solution is not to hide those assets, e.g. in anonymous gold. You can't escape government force, and you're still liable for what you owe. They'll seize other assets you may have, like your home or car, or they lock you up. A system that lets you hide your wealth is not a solution, instead of them seizing your wealth they screw your life in a worse way and accrue penalties that total more than the amount due in the first place. At the end of the road you still owe what they wanted to seize.
The solution is different political policy, more legal protection for citizens to resist undue seizure, fewer mistakes with taxes etc. That, by the way, could happen when all transactions are digital, transparent, and more easily accounted for and reviewed. Even the most modern tax authorities tend to run most calculations on historical data, then give you a chance to correct them once a year. Obviously this is a flawed system: historical data is not accurate (e.g. you lose your job, they send a tax bill on the basis of your old income, you have no money, no taxes due, you must pay a huge bill, then fight it and get the money back. It sucks). And ordinary people have trouble with proper bookkeeping and do not give an accurate account of their finances once a year, it's really hard. In a world where finances are completely digital, this whole story becomes much easier and more accurate. It's far from perfect, but it's an improvement. Combined with citizen protections, a digital banking system can be beneficial.
Privacy and political oppression are enemies of financial transparency and digital systems, there are great arguments to make there against digitisation of banking. But asset seizing that you mentioned, I don't think is one of them, hiding wealth does nothing to solve the problem. That doesn't mean I approve of automatic seizing, by the way, no way. But the solution isn't hiding, it's different procedures, e.g. building in recourse prior to payment being required let alone assets being seized.
In theory, I agree with you. We all need better laws and better governments, and less mistakes.
In practice, however, being faced with this 10x incorrectly calculated tax bill (and I've been there, too), if your money is seized before you can object, you are screwed. My business would have been totally busted in a moment if the money were taken automatically back then. And when this kind of thing happens, your first thought is not "we need a better legal system and transparency!". Your first thought is "where I'll get the money to feed my family tomorrow and pay salaries at the end of the month?"
And even when everything is transparent and all taxes are just and always calculated correctly (we can dream, right?), there's always a question of malice. Politicians are not always neutral unconcerned actors, to say the least.
"Tax avoidance" is not that simple. Tax laws are complex. Often businesses and governments have different opinions on what should be paid, so all tax bills can be opposed and challenged.
I own a small one-person software consulting company in Switzerland, working with international clientele and paying myself a salary. I _still_ have discussions with authorities on what should be paid and why, because its in their interest to claim the most, and in my interest to pay the least (and there are no less than 20 different incredibly complicated laws regulating my business). Often I prove that I am right, and tax claims are reduced, sometimes substantially. If I have paid automatically everything that is claimed by authorities, my business wouldn't survive a single year. For larger companies dealing internationally, it is way more complicated. 50 years ago, to own a "transnational corporation", you had to be a billionaire and run a quite complicated business machinery, and laws were written according to that. Now, a one-man software company can be transnational, but some laws were not updated to reflect it.
Thus, allowing the government to peek into and seize my bank accounts at its caprice would be the disaster for me and my business.
I agree with you 200% here, but the HN crowd don't seem to be able to even conceive that once cash is gone, it only takes a glitch, a bug (in software? Surely not!), or a malicious action by bank or state, and then you are left in a rather desperate state.
Today the bank can, and had recently, make mistakes, but o can still buy food on the way home thanks to cash.
Have an unpopular opinion about the current governing political party? One click later a bank account might experience a "technical difficulty." Named to an unofficial secret list of troublemakers (e.g. "no fly list") by a faceless bureaucrat? ditto.
This applies not only to individuals but also to corporations. The ability to freeze (or "disappear") a corporation's finances with a keystroke could be a powerful political weapon.
From Apple to the EFF to Amnesty International... and the faces that represent them, this could open an entirely new political warfront.
Not even malicious. Just a mistake or law misinterpretation. Banking software systems may seem relatively logical (spoiler: they are very NOT), but legal structure around payments, compliance, taxes, insurance etc. is a mess. Tax returns are commonplace (this means that mistakes in taxation happens all the time).
Currently, if there a mistake, you can challenge it, then pay. What governments want is taking money first, then you can try to challenge it. I'd say no thanks.
Swede here – it's national news whenever any of the payment systems go down. In particular the big bank initiative Swish, which seemingly tend to not cope well with high density situations such as concerts and festivals, garners criticism whenever it goes down since it's advertised as "the alternative to cash." What scares me the most about it is that the system is designed to have you give up control, under the guise of "making your life easier." Tin-foil hat warning perhaps, but fact of the matter is that these institutions (in which I include the government) have shown over and over again why they can't be trusted, not least because when they "make a mistake" it's always the rest of us that end up in the shit for it. You're asked to just deal with it, with little recourse.
I'm all for abandoning physical cash, but we're nowhere near having solved all of the questions, and the current alternatives available in Sweden are demonstrably worse than cash – despite the latter's shortcomings.
Another thing people overlook is that when all peoples money is in the bank, then banks are free to raise all the "fees" they need to "handle" your money.
Also if all peoples money is in the bank, then government can choose what ever tax rate they please and just take the money by simple transaction.
I'm also in Switzerland but I'm pretty sure my ATM limit is much, much lower than 75k. Actually I managed to max out my debit card daily limit just by buying a new MacBook Pro. The limits aren't there because banks hate cash (much), they're there to stop someone being marched to an ATM at knifepoint and being forced to empty their life savings into someone else's pockets.
Admittedly, I have never actually attempted to withdraw more than about 1000 CHF from an ATM. I just assumed the limit is the same as the debit card tx limit, which I have definitely hit.
>>> My ATM daily cash withdrawal limit is 75000 Fr. (not a typo). I dream of hitting it once, but I'm not that rich.
Isn't it a bad idea? Default limits at my bank are around 1000Eur in withdrawals a day but I have reduced my limits to what I might typically need (around 100Eur), just in case I get my card skimmed/stolen to limit the damage.
My personal limits are much lower. 75000 Fr. is as far as I can raise it without hitting an ATM limit. Still, it is quite high amount compared to other European countries, around 4000 Fr.
Skimming doesn't work with my card (set to chip-only operation), PIN code is 6 digits, auto-blocking after 3 attempts, and not written anywhere. I travel a lot, and the ability to get instant cash saved me more than once.
American here. I would love for the ability to set my cards to chip-only operation. I've even considered going so far as to use a magstrip writer to remove all data from the magstrip.
@jon-wood — yes, in most countries, even in the US (though I have found a few incompatible ATMs in Boston).
The only country where all ATMs were hard-wired to accept 4-digit pins was Israel. But I was there 5 years ago, perhaps they upgraded their ATMs since. :)
100 € might be a bit too low. Mine is 800 € a week IIRC, but it also counts for payments via EC (Electronic Cash, i.e. paying with the normal bank account card). I once ran into it on a Sunday after just having paid for a week-long hotel stay. Luckily I had just enough money left to pay the train ticket back home.
Having said that, I also like the relatively low limit to contain the damage in case of skimming or card theft.
There was a money laundry investigation a while ago because someone walked into their local Post Bank and withdrew 4.6 million Franks in cash (in 4600 Thousand Notes). The employees checked if the man had the amount in his account and paid it out. The bank was found not guilty of any wrong doing. [1] However it turned out the guy was a con man and disappeared. Flags should have been raised because of the large electronic deposit just 2 days before but the employees them selves did not know that.
On the subject of money laundering, Joi Ito just recently published an essay linking anti-laundering laws to copyright laws and critical of the usually poor design of both.
Abstract: Intentionally or unintentionally, poorly crafted or outdated laws and technical standards threaten to undermine security, privacy and the viability of our most promising new technologies and networks, such as Bitcoin and Blockchain. We should vigilantly be reviewing and revising laws and standards for the public good and working to prevent the creation of fragile and cumbersome systems designed to comply with these poorly crafted or outdated laws. In this post, I discuss the Digital Millennium Copyright Act’s Anti-Circumvention provision, Digital Rights Management, Anti-Money Laundering Law, Know Your Customer Laws and security backdoors. [1]
— The largest cash note is 1000 Fr. (slightly more than $1000). It is readily accepted everywhere and I can pay for coffee with it and get change. (The coffee will be around $4, or $7 for vanilla latte in Starbucks).
— My ATM daily cash withdrawal limit is 75000 Fr. (not a typo). I dream of hitting it once, but I'm not that rich.
— I can go to the nearest bank and buy a physical gold bar, from 1g to 12 kg, for cash, no questions asked, no papers needed. And sell it later at the same place, with only a nominal fee taken (if still in original package).
And I like it this way. When I travel in any other country, it looks strange to me when even a 100€ bill is frowned upon and probably won't be accepted.