A new report from the Tax Justice Network puts the amount of money diverted offshore into tax havens at $21 trillion. At least. It may be as much as $32 trillion. Even at the lower figure, that's more than the Japanese and American economies combined.
According to James Henry, a former chief economist at consultancy McKinsey, half of that gigantic stash is owned by just 92,000 individuals. That is 0.001 percent of the world's population.
But even that $32 trillion doesn't account for everything. Because TJN's report only covers financial assets, not all the real estate, fancy automobiles, yachts and other non-financial assets owned by the ultra-super-mega-rich.
This offshore sector that specializes in tax dodging, the report's authors say, is "basically designed and operated, not by shady no-name banks located in sultry islands, but by the world’s largest private banks, law firms, and accounting firms, headquartered in First World capitals like London, New York, and Geneva. Our detailed analysis of these banks shows that the leaders are the very same ones that have figured so prominently in government bailouts and other recent financial chicanery."
[James Henry says] "This offshore economy is large enough to have a major impact on estimates of inequality of wealth and income; on estimates of national income and debt ratios; and – most importantly – to have very significant negative impacts on the domestic tax bases of 'source' countries" [...]
"These estimates reveal a staggering failure," says John Christensen of the Tax Justice Network. "Inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people.
Around the world, in very many countries, paying off government debt is dealt with through austerity, cutting programs for the middle and lower classes and imposing tax systems that are unfair on their face. But that's not good enough for the looters. Their offshore stash of trillions goes untaxed.
One major aspect of all this hidden wealth is that it convincingly demonstrates that measurements of inequality between rich and poor (in both income and wealth) are off base. The real gap, already bad enough, is far larger. A major reason for this is that the one percent at the top of the heap rarely participate in surveys that calculate how much wealth and income people actually have. The very poor are also excluded, Milorad Kovacevic, chief statistician of the UN Development Programme's Human Development Report, told Guardian reporter Heather Stewart. Even meticulous programs like The World Top Incomes Database underestimate inequality.
Among the findings:
• The top 50 private banks in the world collectively managed more than $12.1 trillion in cross-border invested assets for private clients.
As TJN's Christensen says, "What's shocking is that some of the world's biggest banks are up to their eyeballs in helping their clients evade taxes and shift their wealth offshore."
I wonder if my jar of quarters counts?