The Tax Justice Network, an organization I frankly had never heard of until this weekend, came out with a study over the weekend alleging that between $21 and $32 trillion in global wealth is being hidden away in tax havens. This represents a sum equal to the GDP of the US and Japanese economces combined. Former McKinsey and Co. chief economist James Henry oversaw the TJN study.
These are assets and not earnings, but the study estimates that if the assets generated even a modest 3% rate of return, the tax revenue off of it would equal between $190-$280 billion worldwide. Instead of going toward productive purposes, that annual take remains in the hands of high net-worth individuals using tax shelters.
A good deal of this wealth, between $7.3 and $9.3 trillion, comes from rich individuals in the developing world. They have sheltered their wealth and denied their largely impoverished countries the ability to raise themselves out of debt and provide for their citizens, through simple tax evasion. Well over $1 trillion of that sheltered wealth comes from China.
As Marcy Wheeler highlights, mega-banks have facilitated this tax abuse in increasing numbers.
…the amount in tax havens grew by 67% between 2002 and 2004, then grew by 40% in the following two years, then by another 23% in the last year of the bubble. Then it crashed, basically losing that 23% and plateauing for a year. And then it started growing again, 18% between 2009 and 2010. And who knows how much in the last year?
What I find particularly interesting–though I’m not sure what to make of it–is the changing share of looter service the big banks are doing. While UBS’ tax shelter dollars continued to grow, they lost market share among tax cheats. Meanwhile Goldman Sachs’ tax shelter dollars almost quadrupled in that time. Bank of America and Wells Fargo made big gains too (though Morgan Stanley’s tax cheat business shrank and JP Morgan’s was somewhat flat.
Like I said, I don’t know what to make of it. But it sure seems like since the crash at least some of the banks have decided to recover by catering to tax cheats.
UBS, Credit Suisse and Goldman Sachs handle the most offshore assets, even after the celebrated 2009 tax amnesty at UBS. But the US mega-banks have increased their share dramatically. And this ends up facilitating a host of other potential abuses, like we saw in the Senate Permanent Subcommittee on Investigations investigation into HSBC.
If you’re wondering how global inequality can continue to rise despite advances in productivity and the promotion of democracy worldwide, it’s due to the ability for the richest people in the world to stash away their money with relative ease. And the global financial system, the executives of which have the net wealth and lifestyle of the richest of the rich, enable this behavior.
James Henry, the chief researcher on the report, said in a statement, “From another angle, this study is really good news. The world has just located a huge pile of financial wealth that might be called upon to contribute to the solution of our most pressing global problems. We have an opportunity to think not only about how to prevent some of the abuses that have led to it, but also to think about how best to make use of the untaxed earnings that it generates.” I’m skeptical that we’ll have that conversation, but we at least have a set of numbers from which to draw.




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Tremendous left right traction, hope some of the big city dailies pick this up.
Helluva a silver lining, Dave.
I feel better. I bet that is exactly they were talking about at the Bilderberg soiree’.
“Put your trust in money and your money in trusts.” — motto of the 1%.
Remember the “bipartisan” “jobs-stimulating” Senate bill introduced last year by McCain and Hagan that would allow corporations to bring back their offshore tax haven money to the U.S. at a small tax rate, rather than the 35 percent tax rate they are supposed to be paying — but not, and leaving the tax burden to the rest of us?
Really? Those job creators are not paying taxes and haven’t been since Bush’s big tax free plan for them. Can someone Pahleeze tell the repubs on tv that the job creators lost their window to create?
It’s now time to tax them their fair share. That bunch of government welfare queens and freeloaders!
“If you’re wondering how global inequality can continue to rise despite advances in productivity and the promotion of democracy worldwide, it’s due to the ability for the richest people in the world to stash away their money with relative ease. And the global financial system, the executives of which have the net wealth and lifestyle of the richest of the rich, enable this behavior.”
For goodness sakes! This type of global financial system is what the government officials mean by “promotion of democracy worldwide”. This is not “despite” that. This is due to “promotion of re-defined democracy worldwide”.
Meanwhile, the private enforcers for the one percent are entirely out of control.
Truth! They have alternate definitions of Democracy. I am shocked that the tax evasion laws that grab movie stars and little working men and women don’t work for these parasites.
Yes, and did you see this?
http://my.firedoglake.com/mzchief/2012/07/22/day-53-approaches-in-portland-or-gentle-peeps-rev-your-engines-u-know-what-2-do/#comment-266210
At least NBC is covering it.
Mr Goldman, Mr Sachs.
Meet Mr RICO.
The MOTUs have a degree of arrogance that typically leads to a chain of little errors, culminating in a large set of errors.
How about the NSA giving the IRS a hand here? Doing some data mining.
Another way to look at this is that these individuals don’t trust their own governments, that the government may whimsically confiscate their money. Yet if you look at it from another angle, I have to laugh, since if you look at our financial crisis, and realize that these guys escaped prosecution because they control the levers of government, yet at the same time they are also afraid of the same control. Wouldn’t it be better if there existed certainty of law, so that everyone knew where they they stand. This very same uncertainty is causing them to move their money offshore. I guess money knows that the tomorrow is uncertain. I would assume that these people are the ones who trust their governments least.
Those dates indicating the rise in offshore accounts corresponds with Bush countering a Clinton rule that tightened reporting requirements when $$$ left our shores.
Clinton put the rule on to better track terror dollars.
I know I read this a few times back in the day, but cannot find on the intertubz.
Sometimes I thing the Net facilitates Soviet-style history re-writes.
It is interesting that a researcher/ analyst possibly earning $100,000 can find details of people and the wealth they are hiding in such places but all these governments with all the resources and legal powers are not able to find these crooks and their hidden wealth. This reminds of the times when rag tag reporter were able to go in remote areas of Afghanistan and get video interview with Bin Laden but our military and CIA will trillions of dollars in expenses were unable to find Bin Laden for years Are these government officials inept or simply the enablers of all the wrong doings we are experiencing?
That’s why they have accounts spread over Switzerland, Bermuda, the Cayman Island, Panama, etc., etc. The fact is, they see the world as a reflection of themselves, so they don’t trust anyone, except to be as conniving and greedy as they are. The world to them is the pile of gold under the tree, and there’s not 2 but 7 billion other thieves to contend for it. They’d gladly swallow it, if their stomachs were large enough and they didn’t fear someone would slice them open to get it.
These are not havens, they are hideouts.
Jobs bills seem to be integral window dressing for offshoring, but I don’t know which one or where we’re at now. This is from Harry Shearer’s August 14, 2011 interview of David Cay Johnston on Le Show:
UBS, Credit Suisse, and Goldman Sachs.
Bailed out, bailed out, and bailed out.*
Tell me AGAIN why we had to save these FUCKERS.
*
http://www.nytimes.com/2008/10/16/business/worldbusiness/16iht-17swiss.17006058.html
http://www.huffingtonpost.com/2012/03/15/hank-greenberg-goldman-sachs_n_1349189.html