Global super-rich elite hiding at least $21 trillion in secret tax havens
A major study has found that global super-rich elite had at least $21 trillion hidden in secret tax havens by the end of 2010.
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, for by the Tax Justice Network.
James Henry said his $21trillion is actually a conservative figure and the true scale could be $32 trillion. A trillion is 1,000 billion.
He used data from the Bank of International Settlements, International Monetary Fund, World Bank, and national governments.
James Henry’s 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.
James 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.
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.
James Henry estimates that since the 1970s, the richest citizens of these 139 countries had amassed $7.3 trillion to $9.3 trillion of “unrecorded offshore wealth” by 2010.
Private wealth held offshore represents “a huge black hole in the world economy,” James Henry said.
Other findings in James Henry’s report include:
• At the end of 2010, the 50 leading private banks alone collectively managed more than $12.1 trillion 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 $9.8 trillion of the wealth held offshore.
James Henry said it was difficult to detail hidden assets in some individual countries because of restrictions on getting access to data.
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