The U.S. Senate subcommittee on investigations held its latest hearings yesterday, hauling in Credit Suisse Group AG chief executive Brady Dougan to account for the company’s history of aiding U.S. tax evaders. Subpoena power is a great thing, and a few of these Senate hearings (think JPMorgan’s London Whale fiasco) have had terrific revelations.
The committee’s 175-page report is accompanied by a lot of the usual Sturm und Drang, but it’s actually a little underwhelming. We already know that Credit Suisse helped thousands of clients evade U.S. taxes. Most surprising here is that the typical secret Swiss bank accounts turns out to be surprisingly small.
An estimated 85 to 95 percent of Credit Suisse accounts held by Americans were not declared to U.S. tax authorities, according to the Senate’s report. The high estimate for how much money was involved comes to about $11.9 billion in 24,000 hidden accounts. That’s less than $500,000 each.
That’s a lower number than The Market Now would have guessed, having always assumed that secret Swiss accounts were for, well, eight-figure-and-up sorts of tax evaders. Presumably a few folks had multiple accounts, but most didn’t, and $500,000 falls easily within the range of upper-middle class savings. The moral of the story here seems to be illegal tax evasion is mainly for ordinary chumps. Maybe because the genuinely rich have plenty of legal tax evasion options.