A Magic Show -- IRS-Style

This morning, the IRS and the Justice Department released information regarding the terms of settlement from a salvo of complaints filed against the Swiss bank UBS.  The traditionally secret numbered accounts, a haven for the miscreant overflow wealth of both the overly industrious and idly endowed members of our upper reaches, finally appear breached in a limited agreement struck by the U.S. and Swiss governments.

According to the data supplied to the press, over 14,000 individuals have come forward to take advantage of an amnesty offer from the IRS.  In addition to that group, there are nearly 5,000 additional individual accounts subject to exposure under the letter of the pact.  All told, up to $18 billion ghost dollars are subject to tax, interest and penalty.  Does that seem like a lot of loot?  Well, yes and no.

Face it - even for the filthy rich, few are liquid enough not to feel it when Uncle Sam taps the piggy bank for three or so million bucks ... especially coming on top of the recent hit taken when the classic legal repositories, corporate bonds and real estate trusts, are also providing a drag on investment income.  No, Nana Rockefeller won't be stocking up on cat food and forgoing the fish eggs, but the Hilton girls had better hope that their forays into the worlds of food and fashion pan out, just in case their trust funds tank.

However, in the grand scheme of worldwide money matters, 50-75% of that $18 billion landing back into the U.S. Treasury barely covers the annual payrolls of the manufacturing and financial industries' corporate welfare recipients.  The money itself, plus the deterrent influence on the horde at-large to hide future income, doesn't really seem on its face to be more than a band-aid for the treatment needed in our current economic triage.  It appears more an attempt to provide some entertainment value to the rest of us, a distraction while we quietly bleed to death.

So, while the IRS pulls a quarter out from behind your ear as you're reading about the poor celebrities forced to accept roles in bad movies or hawk kitchen products to help pay for their sins, remember that it's all done for our amusement.  This well-deserved attack on tax cheats, designed to take our minds off the fact that we're still economically crippled, is a welcome, though temporary, relief.  The USO couldn't do any better.