It’s always been a contentious point between the haves and the have-nots and with the US presidential election entering the end game, it’s certainly a point to rally for or against. Death and taxes, as they say, are the only certain things in life and with calls for increased taxation on the rich, politicians, analysts and indeed the public are divided on whether or not such a move should be done.
Of course, to some it would make sense, but those being taxed might think differently. However, a newly published report stands to expose the so called "super rich" as tax evaders and indeed worthy of increased taxes.
The recent study, titled The Price of Offshore Revisited, written by former chief economist at the consultancy McKinsey, James Henry, states that the "super rich" had secreted away more than $21 trillion by the end of 2010, hiding this money in secret tax havens and it is very likely that the amount could be far greater.
Commissioned by the Tax Justice Network, The Price of Offshore Revisited was a vast study drawing on information from numerous sources such as the Bank of International Settlements, the International Monetary Fund (IMF), the World Bank and numerous world governments and deals specifically with financial assets kept in banks. The report states that because of tax havens, the "super rich" are able to hide this money and evade taxes.
Author James Henry said that this was done with the help of an "industrious bevy of professional enablers in private banking, legal, accounting and investment industries,” adding, "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."
The report makes some very surprising revelations, stating that by the end of 2010, the 50 leading banks around the world were responsible for some $12.1 trillion in private client’s money and managed these sum as "cross-border invested assets." Of the banks themselves, UBS, Credit Suisse and Goldman Sachs handled the bulk of these offshore assets and as to the clients, less than 100,000 worldwide owned around $9.8 trillion in these offshore assets. Mr. Henry described this wealth that was hidden away in these tax havens as "a huge black hole in the world economy."
However, commenting upon the report, tax expert John Whiting said, "I cannot disprove the figures at all, but they do seem staggering. If the suggestion is that such amounts are actively hidden and never accessed, that seems odd - not least in terms of what the tax authorities are doing. In fact, the US, UK and German authorities are doing a lot."