Adonis Diaries

Off-shore parked wealth: $32 trillion. Tax loss: $280 bn

Posted on: July 26, 2012

Off-shore parked wealth: $32 trillion. Tax loss: $280 bn

Aljazeera posted on her blog:

“Rich individuals and their families have about $32 trillion financial assets hidden in offshore tax havens, representing up to $280 bn in lost income tax revenues, according to research published on Sunday.

The research was carried out by James Henry, former chief economist at consultants McKinsey & Co., for pressure group Tax Justice Network that campaigns against tax havens.

The study estimating the extent of global private financial wealth held in offshore accounts – excluding non-financial assets such as real estate, gold, yachts and racehorses – puts the sum at between $21 and $32 trillion.

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.– John Christensen, the Tax Justice Network

This amounts to roughly the US and Japanese GDP combined.

Roughly 10 million people worldwide have offshore accounts, with 100,000 people owning half of those secreted assets. (The same recurring 1% wealth structure)

John Christensen of the Tax Justice Network told Al Jazeera that he was shocked by “the sheer scale of the figures”.

“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,” said Christensen.

 

“We’re talking about very big, well-known brands – HSBC, Citigroup, Bank of America, UBS, Credit Suisse – some of the world’s biggest banks are involved… and they do it knowing fully well that their clients, more often than not, are evading and avoiding taxes. Much of this activity is illegal”.

James Henry used data from the World Bank, International Monetary Fund, United Nations and central banks.

The report highlights the impact on the balance sheets of 139 developing countries of money held in tax havens by private elites, putting wealth beyond the reach of local tax authorities.

The research estimates that since the 1970s, the richest citizens of these 139 countries had amassed $7.3 to $9.3 trillion of “unrecorded offshore wealth” by 2010.

Private wealth held offshore represents “a huge black hole in the world economy,” Henry said in a statement.

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