Wealth doesn't trickle down – it just floods offshore, new research reveals

[Judi Lynn]

Wealth doesn't trickle down – it just floods offshore, new research reveals

A far-reaching new study suggests a staggering $21tn in assets has been lost to global tax havens. If taxed, that could have been enough to put parts of Africa back on its feet – and even solve the euro crisis

Heather Stewart
guardian.co.uk, Saturday 21 July 2012 16.00 EDT

The world's super-rich have taken advantage of lax tax rules to siphon off at least $21 trillion, and possibly as much as $32tn, from their home countries and hide it abroad – a sum larger than the entire American economy.

James Henry, a former chief economist at consultancy McKinsey and an expert on tax havens, has conducted groundbreaking new research for the Tax Justice Network campaign group – sifting through data from the Bank for International Settlements (BIS), the International Monetary Fund (IMF) and private sector analysts to construct an alarming picture that shows capital flooding out of countries across the world and disappearing into the cracks in the financial system.

Comedian Jimmy Carr became the public face of tax-dodging in the UK earlier this year when it emerged that he had made use of a Cayman Islands-based trust to slash his income tax bill.

But the kind of scheme Carr took part in is the tip of the iceberg, according to Henry's report, entitled The Price of Offshore Revisited. Despite the professed determination of the G20 group of leading economies to tackle tax secrecy, investors in scores of countries – including the US and the UK – are still able to hide some or all of their assets from the taxman.

More:
http://www.guardian.co.uk/business/2012/jul/21/offshore-wealth-global-economy-tax-havens

[Major Nikon]

1. It trickles down

Just not here

[Skittles]

5. it trickles down in the form of piss

on the poor and the middle class

[DCKit]

15. "Golden Showers" sounds kind of glamorous....

but I thing you like teh kinky sex as much as I do, which is "none of the above".

Tax the frack out of those motherfrackers. They can either choose to invest in infrastructure and employment, or they can shift it over to the IRS.

[Richard D]

2. I wonder why

The US was not included in their graphic?

[nxylas]

4. Because it's not a tax haven

The graphic shows where the money is being stashed, not where it originates.

[Richard D]

13. Ah, of course. Thanks.

[xchrom]

3. Du rec. Nt

[thelordofhell]

6. And the rich pricks here have the audacity to want a tax break to bring it back

[ErikJ]

7. They laugh at us all the way to their Swiss banks

[Curmudgeoness]

8. Those are truly astonishing numbers.

And with amounts like this, I see no way that the people with this money will "let" the US or other countries make changes.

[Andy823]

9. Yes this is a global problem

And until all the world leaders get their act together and work together to stop this kind of tax evasion, then it will continue. However if global laws aimed at those who hide their taxes abroad are enacted in order to put and end to all these tax havens, if they go after the financial industry and actually regulate them so they can't hide money for people, then maybe, just maybe it would end. Of course I am not going to hold my breath till they do something!

[Smilo]

10. I have known some pretty

wealthy people and they all had one thing in common - they were so scared of losing even a penny and would cheat and lie to protect their wealth.

I had no idea that this was the amount of money that was been hoarded. Maybe TLC could do a new reality show based on hoarding + live styles of the rich and famous.

I have never wanted to be super rich - I would like enough to not have to worry about sudden emergencies cropping up, but having seen the insecurity, the meanness and nastiness of those that are super wealthy it is something I definitely don't want.

And really - who can take it with them when the go?

[JoePhilly]

11. Exactly, the super rich will put their tax breaks in foreign bans, not in US jobs.

After all, that's EXACTLY what Romney did.

You don't send money to Swiss bank accounts to create US jobs.

You don't send money to accounts in Bermuda to create US jobs.

And you don't set up shell corporations in the Cayman Islands to create US jobs.

[quaker bill]

12. Rich people don't create jobs

it is too risky and does not pay enough. The truly wealthy manipulate financial instruments and stash their money off shore to avoid taxes. Ordinary business profits are taxed at 2+ times the rate of capital gains on financial instruments. Creating jobs raises your taxes and takes a long time to create profits. Financial instruments can be profitable today, and capital gains on them are taxed at a lower rate.

It does not take a rocket scientist to figure it out.

[ck4829]

14. K&R

[shcrane71]

16. Kicking