A global super-rich elite has exploited gaps in cross-border tax rules to hide an extraordinary $21 trillion of wealth offshore – as much as the American and Japanese GDPs put together – according to research commissioned by the campaign group Tax Justice Network.
James Henry, former chief economist at consultancy McKinsey and an expert on tax havens, has compiled the most detailed estimates yet of the size of the offshore economy in a new report, The Price of Offshore Revisited, released exclusively to the Observer.
He shows that at least $21 trillion – perhaps up to $32 trillion – has leaked out of scores of countries into secretive jurisdictions such as Switzerland and the Cayman Islands with the help of private banks, which vie to attract the assets of so-called high net-worth individuals. Their wealth is, as Henry puts it, “protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy”. According to Henry’s research, the top 10 private banks, which include UBS and Credit Suisse in Switzerland, as well as the US investment bank Goldman Sachs, managed more than $6.5 trillion in 2010, a sharp rise from $2.5 trillion five years earlier.
The detailed analysis in the report, compiled using data from a range of sources, including the Bank of International Settlements and the International Monetary Fund, suggests that for many developing countries the cumulative value of the capital that has flowed out of their economies since the 1970s would be more than enough to pay off their debts to the rest of the world…
The problem here is that “the assets of these countries are held by a small number of wealthy individuals while the debts are shouldered by the ordinary people of these countries through their governments,” the report says…
And here in the United States, we are told we should vote to elect a leading representative of the tax cheats this report is all about – to be president of the country.
This has been part of supply-side theory as well. It is not ‘trickle-down’ a term that precedes Reagan by decades. Part of it is lower tax rates boosts the incentive to produce, and also part of it is that lower tax rates reduce the amount of tax cheating. This is also in Adam Smith’s Wealth of Nations.
I would agree with this, except that I have heard moderately rich people are more likely to pinch that last penny.
Hopefully JCD can provide his input.
My bottom line view is that people are greedy, and will keep as much as they can through methods they have established. Lowering taxes doesn’t change their behavior.
There is a cost benefit analysis. Cheating is not nearly as profitable with lower tax rates, so some people will move back onto the tax rolls rather than risk prosecution.
Also, there was a tax amnesty given under George W Bush, that brought lots of foreign money back to America at reduced rates.
Identical situation as with the content piracy, just most commenting here would be on the opposite side there. If countries would charge REASONABLE taxes – taxes free market situation can support, same as if content providers would provide what we want at the price market is willing to pay… we would have minimal tax evasion/piracy. It is free market live and well in both cases. In both cases solution is not in locking everyone up but in change of taxing/providing policies and business model (yes, taxation is a business model, failing when attempting to steal from rich [not stealing from rich - when rich are supposed by law to pay identical percentage of their income as any other person]).
Sell not virtue to purchase wealth, nor Liberty to purchase power.
No man’s life, liberty or fortune is safe while our legislature is in session.
Our Constitution is in actual operation; everything appears to promise that it will last; but in this world nothing is certain but death and taxes.
It would be thought a hard government that should tax its people one tenth part.
When the people find they can vote themselves money, that will herald the end of the republic.
Life’s tragedy is that we get old too soon and wise too late.
– Benjamin Franklin (1706-1790) US Founding Father
Almost right…
No man’s life, liberty or fortune is safe while our legislature is in session.
Don’t you mean to say, “no man’s life, liberty or fortune is safe while legislators (mostly liberal’s) try to make things equal”? That’s COMMUNISM!
I, however, place economy among the first and most important republican virtues, and public debt as the greatest of the dangers to be feared.
The mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of God.
What a stupendous, what an incomprehensible machine is man! Who can endure toil, famine, stripes, imprisonment & death itself in vindication of his own liberty, and the next moment … inflict on his fellow men a bondage, one hour of which is fraught with more misery than ages of that which he rose in rebellion to oppose.
Were parties here divided merely by a greediness for office, to take a part with either would be unworthy of a reasonable or moral man.
I never submitted the whole system of my opinions to the creed of any party of men whatever, in religion, in philosophy, in politics or in anything else, where I was capable of thinking for myself. Such an addiction is the last degradation of a free and moral agent. If I could not go to Heaven but with a party, I would not go there at all.
When a man assumes a public trust, he should consider himself as public property.
– Thomas Jefferson (1743-1826), US Founding Father, drafted the Declaration of Independence, 3rd US President
OK,
for the Critics of Obama..
Why pick on him, its the OTHER 300 idiots you put into office, as WELL as the other 100,000 around them, that have had jobs for 40 years in government..
What are the educational basis for electing a president??
What knowledge, abilities, experience?? NONE!!
And they can only DO what the OTHERS around him tell him is the RIGHT THING..
LEts STATE this as a Decadent corporate Mentality..
WOW, you lower my taxes, COOL.
Do I lower the PRICES?? not as much as I GET..
WOW, I found a way to not pay as much taxes, should I give back to the CONSUMER..NOT happening.
WOW, I can have Products made over seas, SHIPPED, distributed(my own trucking company) for less then having a USA PERSON(with any benefits) just to make the product. BONUS, I get a pay raise.
WOW, we made extra profit this year, should I give it to the Stock holders? or lower prices and sell MORE of the CRAP that cost $5 and sold for $50…NEITHER..now I need to find a way to HIDE IT..
Ok, I got all this money, but HOW to hide it.. pay another group to Push congress to change CERTAIN regulations/laws about taxes..Lets put a small loophole THERE..(yes there is a group).. They suggest making my OWN PRIVATE bank…(money laundering) The bank shows money going in, but its based on the STOCK exchange the banks VALUE keeps going DOWN, so money is evaluated LOWER as it looks as if its failing..
Bank fails..I can show a LOSS, but the money was SHIPPED OVER SEAS…
PARTY..
I agree. If you do the reading and research you’ll find that it’s out government that bends to the will of the lobbyist and outsides influences. These are happening because our officials are incapable of integrity, of pride.
This isn’t going to be resolve anytime soon or easily for that matter. There are too many powerful players in the game. The rich will use their dollars to persuade others so that they in turn can keep more. It really is that simple.
If the government could put Al Capone in jail for tax evasion, why can’t they get the rich US citizens that do it as well? Oh that’s right, the ones that are in charge are the ones doing it. Romney is among those that are criminals of the worst kind. The uber rich that step on the throats of others and get richer doing it. A complete overhaul of the laws surrounding white collar crime is greatly needed. Do you think that these white collar clowns would break the law as often if they faced the same punishment as bank robbers and drug dealers? I don’t think that they would risk federal, pound me in the ass, prison for twenty years. Instead they get a fine and house arrest for stealing millions of dollars. They guy that sticks up a bank with a plastic gun gets 10 years in jail. The system is broken and we let it go on.
“System”? Broken?!
When was the last time you read any HISTORY?!
There’s nothing really all that new here. Just slightly new rules and different players is all. But make no mistake that the same game is still being played that has been going on ever since man (and woman) first realized how to steal from his fellow man.
Maybe you’ve heard the saying, “money is the root of all evil”? That’s good advice to keep in mind any time someone is asking for more of it, or demanding it.
I’d stay Anon too if I was this stupid says:
Watch this video: http://youtube.com/watch?v=eLUASI8baDw which is the meat puppet Chuck Woolery chiding America for it competitive malaise. You know–we don’t work hard enough and therefore don’t deserve to be rich.
Ahem!…… the reason this recovery is likely headed to a double dip recession slide to depression is that the current situation is not part of a normal business cycle. No. Its a “reset” taking into account computerization and outsourcing. Millions of jobs have left the USA and they aren’t coming back until oil hits $200 a barrel and THAT assumes China doesn’t build even bigger cargo ships.
When a new factory employs 300 high skilled computer operators to replace the old factory that employed 1500 high school drop outs, “hard work” isn’t the issue.
Course—Chucky will read anything put in front of him. He’s hard working that way. Why are you?
Hit a nerve did I? Don’t like seeing truth even when it’s presented in comedic form from hitting from you square in the old logic center do you?
Keep up with your socialist doctrine and liberal thinking. Ya, THAT’S the answer. Let’s all bow down to the wisdom and clear thinking YOU have laid at our feet. Let’s all allow another SOCIOPATH like YOU run things for a while. RIGHT?!!! (Just look at your username if you DON’T think you’re a little mentally deranged!)
Your constant argument seems to always be that it worked so well in Nazi Germany and Soviet Russia that it’s high time we all just close our minds, listen to the “enlightened” ones, and let it happen right here in the good old USA. But I guess in your mind that’s an acronym for Union of Socialist Achievers.
You’re not just a fool. YOU ARE A DAMNED FOOL!
The one thing that YOU and a lot of other STUPID people don’t seem to realize is that all economies run on money! So GET SOME!
It’s natural that a few people will have more money than others and probably want to protect what they’ve earned too. That’s a NATURAL law! Care to guess just how “fair” nature is?
And when you FAIL to to take that degrading job that any Mexican would take or work the system that other stupid “bad” people seem to be able to work then I’m sure we can all hear from you just how how much better things would be since you have all the answers. (Care to guess why American’s are often perceived as being ARROGANT?!)
But again, here’s a news flash that’s not all that new, LIFE ISN’T FAIR! Get used to it!!! And if you don’t like it you can still do something about it in a free society like get off your fat lazy American ass and go dig a hole or something more PRODUCTIVE than blogging.
Perhaps you’d like to take a good long hard look at your own VALUES while you’re at it too!
Anon beating his own dead horse continues …..
Gee Whiz Anon–nothing but straw man arguments, hyperbole, overstatement, and missattribution.
A TeaParty activist thru and through?
What a dolt.
Yawn! Envious people are so boring…
Pedro/Introspection????
Ha, ha….. so close.
Fine reply from someone who stole my use of Devo phrases here in the blog. Envious much?
Pelosi is part of that elite, she really got angry when the propaganda press forgot their job was to “get” Romney, and threatened a reporter “I think all newsmen should reveal their income tax returns”…to a question whether she would release hers…now that she demanded Romney do so.
If I were Romney, as Rush Limbaugh suggested, I proclaim “if Obama gets reelected, I’ll be taking the rest of my money out of country just like Pelosi….”
So, all the effort last year by the IRS was worthless. The swiss banks giving the US regulators their client info so the IRS could get them and all the court cases the IRS won and all the people who came forward and declared their assets….
Hmmmmmmm.
Either the IRS is COMPLETELY incompetent, or this news item is really about stirring up the population to hate rich people, which seems to be Obama’s modus operandi.
My vote, it’s yet more democrat hate mongering. Typical. So typical.
s internet. Yes, you don’t have to toil all over your neighborhood to uncover the ideal computer exercising as well as Term 2007 schooling company.
Clearly the Laffer curve requires recalculation as tax rates are far below 70%.
http://en.wikipedia.org/wiki/Laffer_curve
Wow, I think we have one big sour grape here…
There are about 350 million Americans. There are probably only about a 100 who would be worse than the current POTUS.