Tax havens: Super-rich 'hiding' at least $21tn

A global super-rich elite had at least $21 trillion (£13tn) hidden in secret tax havens by the end of 2010, according to a major study.

The figure is equivalent to the size of the US and Japanese economies combined. The Price of Offshore Revisited was written by James Henry, a former chief economist at the consultancy McKinsey, and commissioned by the Tax Justice Network. He said $21tn is a conservative figure and the true scale could be $32tn. A trillion is 1,000 billion.

Mr Henry used data from the Bank of International Settlements, International Monetary Fund, World Bank, and national governments. His study deals only with financial wealth deposited in bank and investment accounts, and not other assets such as property and yachts. The report comes amid growing public and political concern about tax avoidance and evasion. Some authorities, including in Germany, have even paid for information on alleged tax evaders stolen from banks. The group that commissioned the report, Tax Justice Network, campaigns against tax havens.

Mr Henry said that the super-rich move money around the globe through an "industrious bevy of professional enablers in private banking, legal, accounting and investment industries. "The lost tax revenues implied by our estimates is huge. It is large enough to make a significant difference to the finances of many countries. "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," he said.
'Huge black hole'

The report highlights the impact on the balance sheets of 139 developing countries of money held in tax havens that is put beyond the reach of local tax authorities. Mr Henry estimates that since the 1970s, the richest citizens of these 139 countries had amassed $7.3tn to $9.3tn of "unrecorded offshore wealth" by 2010. Private wealth held offshore represents "a huge black hole in the world economy," Mr Henry said.
Other findings in the report include:

At the end of 2010, the 50 leading private banks alone collectively managed more than $12.1tn in cross-border invested assets for private clients  The three private banks handling the most assets offshore are UBS, Credit Suisse and Goldman Sachs. Less than 100,000 people worldwide own about $9.8tn of the wealth held offshore.

I wrote the following back in 1998 and it still applies:
 


Tax the Super Rich

End Poverty, hunger and despair for millions of human beings in America and throughout the World: Tax the Super Rich and create an Economic Boom in the process.

The Super Rich are an abomination before God. They are an abomination to any decent society. They are a serious threat to the Nation's international trade relationships. And they are supreme evidence of a dysfunctional social system guaranteeing social destabilization caused by enormous disparities in the distribution of socially produced goods and services. The Super Rich get that way by unconscionable conduct. By using unfair economic advantages over less economically fortunate or less aggressive individuals, the Super Rich are those individuals and families who run monopoly empires, ruling like kings over mass distribution systems such as energy, computers, drugs, weapons, sports, entertainment, communications, any systems or products that have gigantic mass markets. Once an enterprise or an individual reaches the multi-million dollar bracket, further gains become almost automatic. Bank interest payments alone will continually add gigantic amounts of new wealth to these few individuals and families.

Our current legal and business system favors Big Money enterprise over smaller enterprises. Competition gets reduced and eliminated as corporate monopoly players team together to force out competition from smaller enterprises. It's time to put a stop to the social irresponsibility of letting the Super Rich system continue. Putting enormous fortunes into the hands of a privileged few who earn as much as the combined earnings of 90% of American citizens cannot be tolerated. Putting enormous fortunes in the hands of these few Super Rich while millions upon millions of people live in constant threat of starvation is barbaric behavior and totally unconscionable in any civilized society worthy of the name. We must end the Super Rich socially criminal behavior like we ended Al Capone's criminal career. We tax them out of existence. We regain our economic strength by having Congress legislate either an Act of Congress or an Amendment to the Constitution that simply states:

1) All U.S. citizen will be taxed at a rate of 100% for any income exceeding one million dollars per year, with no exceptions, no loopholes, no way for any individual to acquire over one million dollars per year.
2) No individual or corporation can hold assets exceeding one million dollars per year or transfer assets exceeding a million dollars per year into foreign bank accounts without the same tax law applying.
3) All taxed income over one million dollars per year is to distributed to Social Security programs, Medicare programs, educational grants, low interest home and business loans to low and moderate income families and individuals, and environmental protection projects.
4) A fund will be established for United Nations and various church and charitable organizations' for bringing food, clothing, shelter, and cooperative community self-sufficiency programs and advisers to the world's desperately poor.

Taking this action will only effect the illegitimate prosperity of a very few number of individuals while it will bring the middle-class back into its rightful prominence as the stable economic and social backbone of America. This action will also begin an Economic Boom era for America's economy as the Super Rich are forced to divest their holdings and companies. With divestment mandatory, re-investment will occur and hundreds, if not thousands of new businesses and jobs will be opened up. This action will rightfully gain America new productive members of society as well as opening up huge new markets both within the U.S. and throughout the world. This action will start a worldwide precedent for all nations laboring under the thumbs of about 250 Super Rich individuals who's combined yearly incomes could feed and house the majority of the world's people and allow them the opportunity to rise out of unnecessary poverty and hopelessness. And this action won't stop the benefits of entrepreneurism. There's still plenty of room left for enterprising individuals to prosper with every year with the opportunity to become multi-millionaires.
Society should rightfully honor those individuals who organize economic enterprises that service and enhance our lives. But the economic rewards of entrepreneurial creation must not become ends in themselves or society suffers. A taxation system like this will return us pride in being Good Americans--giving as we receive--just as this taxation system will brings us new days when to be a "millionaire" will really mean something special once again.