This is the Cato Daily Podcast for Tuesday, April 1st, 2008.

I'm Caleb Brown.

Tax havens are under assault in Europe as high tax countries seek to invade the privacy of bank depositors in low tax countries.

Cato Senior Fellow Dan Mitchell believes it's all about revenue.

Instead, he argues high tax countries should compete by lowering taxes.

There are a handful of countries in Europe that still have financial privacy laws protecting the rights of citizens.

The Swiss privacy laws or bank secrecy laws as they're sometimes called.

They date back to the 1930s when Switzerland was trying to protect Jews who were fleeing or at least their money was fleeing from the Nazis and so Switzerland very they strengthened very substantially their There are bank secrecy or

financial privacy laws again to protect the human rights of these people.

Now in the modern era what has happened is as some countries like Germany and France and others have imposed

very high tax rates some people are moving their money to places like Switzerland or

Liechtenstein or Austria because they're trying to protect themselves against oppressive

taxation and that's getting some of the politicians from high-tax nations

upset. As you say the Switzerland Swiss have a very good reason to have these

types of laws on the books, these other countries

are putting a great deal of pressure on them to do what exactly?

Well what the high tax countries want is for countries like Switzerland to emasulate to basically

eliminate their financial privacy laws insofar as allowing foreign tax collectors to snoop through those accounts.

Again, the problem is that some countries have very high tax rates, those high tax rates are causing money to flee the country and the politicians from those countries

want to be able to track and tax those funds.

If a German citizen puts their money in a Leichtenstein or a Swiss or for that matter a New York bank

account. They are not breaking Swiss or Leichtenstein or US laws. They might be breaking

...