A new study released today shows that a global super-rich elite owned at least $21,000 billion in secret tax havens at the end of 2010. The figure is equivalent to the size of U.S. and Japanese economies combined, according to a study cited by the BBC. The study “The Price of Offshore Revisited” was developed by James Henry, former chief economist at the consulting company McKinsey, and was commissioned by Tax Justice Network (TJN), which campaigns against tax havens. According to James, $21.000 billion is the minimum figure and the actual size may be $32,000 billion. He used data from the Bank for International Settlements, International Monetary Fund, World Bank and national governments. His study only deals with financial assets deposited in bank and investment accounts, and not other assets such as properties and yachts.
Who moves the money
The report comes amid growing public and political worry about tax evasion. Some authorities, including German, even paid for information stolen from banks by hackers on suspected tax evaders. Henry said that super-rich persons transfer money to worldwide locations through a “hard working group of professional facilitators from private banks, legal, accounting and investment institutions.”
“Loss of tax revenue is huge, according to our estimates. It is large enough to make a significant difference in the finances of many countries,” said Henry. “Looking from another angle, this study is really good news. The world just located a tremendous amount of financial wealth that could be called upon to help resolve our most pressing global problems”, he said.
Black hole in the world economy
The report highlights the impact it have on the balance of 139 developing countries the money held in tax havens, placed beyond the reach of local tax authorities. Henry estimates that since 1970, the wealthiest citizens of the 139 countries collected before 2010 between $7,300 and $9,300 billion in “offshore unregistered assets”. The private wealth held offshore is “a huge black hole in the global economy,” said Henry.
Among other findings of the report is the fact that as at the end of 2010, 50 private banks have managed collectively over $12,100 billion in assets for private clients in tax havens. Also, the three private banks who handle most offshore assets are UBS, Credit Suisse and Goldman Sachs. More than 100,000 people worldwide have offshore assets worth about U.S. $9,800 billion.
For more information, read the full press release of “The Price of Offshore Revisited” study.
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