It is the latter that most directly affects Switzerland's institutions. As the US continues to accrue an elephantine debt, the hunt for missing money has led some ideological rivals to find common ground.

J.D. Foster, a senior fellow and tax policy specialist at the Heritage Foundation, a conservative think tank in Washington DC, sympathises with people who want lower taxes but says US citizens must comply with the rules.

"People should not be breaking the law," he told swissinfo.ch at the Heritage Foundation's offices, four blocks east of the White House.

A budget official in the George W. Bush administration until 2007, Foster muses that many "northeastern liberals" hide their money in offshore centres and then vote for liberal politicians who will raise domestic personal income taxes – which they avoid.

Michael Ettlinger, vice president for economic policy at the Center for American Progress, a left-leaning think tank, agrees that the US is justified in its stance on Swiss banking. He says the Obama administration could not justify raising taxes domestically without pursuing evaders.

To that effect, the US has taken more seriously the efforts that the Organisation for Economic Co-operation and Development (OECD) began a decade ago. Troubled by their own economic conditions, politicians east of the Atlantic have stepped up efforts to pursue fleeting assets.

Squirrelling their nuts

US authorities say that by pursuing tax evaders more aggressively, they can generate $210 billion (SFr227 billion) over the next ten years. Ettlinger believes the figure could be higher. Whatever the amount, Foster looks forward to finding out the identities of those squirrelling their money overseas.

He may find out soon. The US Internal Revenue Service (IRS) is trying to persuade a Florida judge to compel UBS, Switzerland's largest bank, to disclose the identities of as many as 52,000 account holders it suspects of hiding $15 billion (SFr16 billion) in assets. Their indiscretions are unknown.

The Swiss government and a coalition of industry associations have filed third-party briefs, arguing that forcing UBS to disclose client names would violate Swiss sovereignty as well as existing bilateral agreements. The Swiss want the court case dropped and replaced with a diplomatic solution.

"The IRS, along with the Justice Department, are going to do their job as best as they see fit to get as many people they believe have information that leads to taxable income as possible," said Nicholas Mirkay, a professor at Widener University School of Law in Wilmington, Delaware.

Carl Levin, a Democratic Senator from Michigan, is one of the harshest critics of Switzerland among US legislators. In 2007 Levin said tax havens "peddle secrecy the way other countries advertise high-quality services".

Supply stimulates demand

And advertise they did. The UBS case, which has for the most part been relegated to the financial pages in the US, piqued the interest of the New York Times editorial board.

The newspaper noted on May 2 that "UBS has already been caught soliciting illicit business in the United States. It admitted in court that it sent dozens of bankers on thousands of trips with devious stratagems to hide money from tax authorities".

"This is a case where supply has actually stimulated demand," John Christensen, a development economist and former economic advisor to the government of Jersey, a British tax haven, told swissinfo.ch.

Christensen believes that the rapid growth of high net worth individuals over the past decade has raised the profit potential for the world's private bankers. He also believes that the industry's main players – not only Swiss banks but British and American banks – have lost some of the discretion that characterised private banking in the past.

Christensen, who is also director of the international secretariat at the Tax Justice Network, a coalition that includes Swiss development charities, argues that when large corporations and the very rich set up complex structures to avoid taxes, "they're not just breaking the law".

"They are confronting head-on democracy, the will of the people, the state and the ability of states to tax progressively."

Social contract

It is that confrontation that in his view overrides the right to privacy.

"Privacy is a very important human right but at the same time, the basis of modern society relies upon a social contract between citizen and state, and that social contract has tax at the very heart of it," he said.

Christensen's message to libertarians: by offering secret banking, countries like Switzerland "impinge on the national sovereignty" of the United States.

He acknowledges that while Switzerland has cooperated with foreign jurisdictions on individual tax fraud cases, Bern is taking a "very legalistic" view of the issue.

"Until now, they have not treated tax evasion as a criminal activity," he said.

And if they did? Ettlinger doubts people would risk depositing their money in non-reputable centres just to avoid paying taxes.

Foster believes other jurisdictions would move to fill the void "even if only for ten years or so" before being cut down by the bigger powers.

Justin Häne in Washington DC, swissinfo.ch