Tax havens: Super-rich 'hiding' at least $21tn

[Junigenmukyoku]

http://www.bbc.co.uk/news/business-18944097

A global super-rich elite had at least $21 trillion (£13tn) hidden in secret tax havens by the end of 2010, according to a major study.

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.

Tax expert and UK government adviser John Whiting said he was sceptical that the amount hidden was so large.

Mr Whiting, director of the Office of Tax Simplification, said: "There clearly are some significant amounts hidden away, but if it really is that size what is being done with it all?"

Mr Henry said his $21tn is actually a conservative figure and the true scale could be $32tn. A trillion is 1,000 billion.

Mr Henry used data from the Bank of International Settlements, International Monetary Fund, World Bank, and national governments.

His 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.

Mr 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.
'Huge black hole'

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.

Mr Henry estimates that since the 1970s, the richest citizens of these 139 countries had amassed $7.3tn to $9.3tn of "unrecorded offshore wealth" by 2010.

Private wealth held offshore represents "a huge black hole in the world economy," Mr Henry said.

Mr Whiting, though, urged caution. "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."

He also pointed out that if tax havens were stuffed with such sizeable amounts, "you would expect the havens to be more conspicuously wealthy than they are".

Other findings in Mr Henry's report include:

At the end of 2010, the 50 leading private banks alone collectively managed more than $12.1tn 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 $9.8tn of the wealth held offshore.

Mr Henry told the BBC that it was difficult to detail hidden assets in some individual countries, including the UK, because of restrictions on getting access to data.

A spokesman for the Treasury said great strides were being made in cracking down on people hiding assets.

He said that in 2011-12 HM Revenue & Customs' High Net Worth Unit secured £200m in additional tax through its compliance work with the very wealthy.

He said that agreements reached with Liechtenstein and Switzerland will bring in £3bn and between £4bn and £7bn respectively.

I always thought it was pretty stupid that it was happening and now the figures come out. It's pathetic that these super rich people are dodging tax and hoarding money in their offshore accounts while enjoying the rights and freedoms in the country they're living in. I think the government should do something about these people.

What do you guys think, should they be held accountable or is it not our business since it's legal to do so via loopholes and etc?

[markom]

Countries are run by super rich, why would they shoot themselves in the foot?

[DaleCooper]

Yes, and people on RFD complain about schmuck having 10k debt and calling him irresponsible. People need to wake up.

[kasianman]

No trickle down from super rich? lol

[iEyeCaptain]

diggler, stop hiding yo money

[Ottomaddox]

If the guy at the trailer park doesn't declare his bingo winnings on his taxes, should we be surprised that the ultrarich manipulate the system to do essentially the same thing, just at a larger scale?

[uber_shnitz]

You're telling me if you had money you wouldn't try to keep as much of it as possible through any legal loophole available to you?

[fakishan]

lotto winnings are not taxed

yes, those offshore funds should be frozen and seized

[Simaahoy]

Rich people are greedy pigs.

[BornRuff]

http://www.bbc.co.uk/news/business-18944097


I always thought it was pretty stupid that it was happening and now the figures come out. It's pathetic that these super rich people are dodging tax and hoarding money in their offshore accounts while enjoying the rights and freedoms in the country they're living in. I think the government should do something about these people.

What do you guys think, should they be held accountable or is it not our business since it's legal to do so via loopholes and etc?

Well, to be fair, for the most part, these people are still paying way more than the average person in actual dollar amount of taxes. Implying that they are not paying enough to be deserving of the rights and freedoms of the country they live in might not be fair if you look at it that way. They certainly should be following the law and paying what they are supposed to pay though.

[stealth]

"hiding"?....the way I heard Bono and Edge tell it, they were merely being "tax-efficient....as anyone would" when asked why they keep most of their assets in The Netherlands, among other places, in spite of waving their cash s trapped home country Ireland's flag in concerts.

But they ll likely be given the nobel peace prize, or honorary knighthood for their charitable acts someday ;)

Face it, the rich can afford the smartest ppl to ensure they keep as much of their money as possible. Life isn't fair, as long as they're not breaking any laws, not much that can be done.

[gman]

http://www.bbc.co.uk/news/business-18944097


I always thought it was pretty stupid that it was happening and now the figures come out. It's pathetic that these super rich people are dodging tax and hoarding money in their offshore accounts while enjoying the rights and freedoms in the country they're living in. I think the government should do something about these people.

What do you guys think, should they be held accountable or is it not our business since it's legal to do so via loopholes and etc?

Who does not do the same thing if they can? How many people here ask how to avoid paying tax for the stuff they bought oversea? How many people here give their money to underground economy to save money?

[BornRuff]

"hiding"?....the way I heard Bono and Edge tell it, they were merely being "tax-efficient....as anyone would" when asked why they keep most of their assets in The Netherlands, among other places, in spite of waving their cash s trapped home country Ireland's flag in concerts.

But they ll likely be given the nobel peace prize, or honorary knighthood for their charitable acts someday ;)

Face it, the rich can afford the smartest ppl to ensure they keep as much of their money as possible. Life isn't fair, as long as they're not breaking any laws, not much that can be done.


Who does not do the same thing if they can? How many people here ask how to avoid paying tax for the stuff they bought oversea? How many people here give their money to underground economy to save money?

The idea of simply doing what you can do to pay less taxes isn't evil. As pointed out, everyone will do whatever they can to pay less tax if given the chance.

[stealth]

The idea of simply doing what you can do to pay less taxes isn't evil. As pointed out, everyone will do whatever they can to pay less tax if given the chance.

Yup, and I don't have a problem with it...except when they act self righteous.

[ovechkin1]

Yes, and people on RFD complain about schmuck having 10k debt and calling him irresponsible.

+1 Irrational do-gooder moron syndrome.

[LaserEnvy]

So tax evasion is the way to become a high net worth 100k individual?

[wilsonlam97]

IDRC if the rich are hiding their money. It's still not going to help having bad decisions made by our government.

[Rainne]

Anyone with half a brain would do the same, why not take advantage of opportunities?

[diggler649]

diggler, stop hiding yo money

Not me! I've only got about $1 billion in offshore accounts. I do have several billion in gold bars hidden away in various vaults around Toronto, and the rest of my money is in my bed because I sleep better on stacks of money than my $60,000 luxury handmade Hastens mattress.

[gman]

So tax evasion is the way to become a high net worth 100k individual?

Tax evasion != tax avoidance.

If it is tax evasion, the government can charge the individual. If the government does not enforce the tax law, it is government's fault.
Tax avoidance is totally legal.

[spike1128]

Not me! I've only got about $1 billion in offshore accounts. I do have several billion in gold bars hidden away in various vaults around Toronto, and the rest of my money is in my bed because I sleep better on stacks of money than my $60,000 luxury handmade Hastens mattress.

We love Gold Bars diggler. Us RFD knows you don't need all that money, you got to share it with the rest of us. You know, we charge you 100/hr to give you dating/relationship advice.. It's worth it.

I think what you need to do it's get rid of your high net worth, so the women will date you for you NOT for your money. :)

[Forhad]

If they pay tax properly gov. can spend those money for our welfare.

[gman]

If they pay tax properly gov. can spend those money for our welfare.

You mean for their welfare. ;)

[Kohanz]

The idea of simply doing what you can do to pay less taxes isn't evil. As pointed out, everyone will do whatever they can to pay less tax if given the chance.

Everyone will do what they can legally to pay less tax. Big difference.

[Hitman21]

What these people are doing is LEGAL so I dont understand all the outrage over this. Many Canadians who aren't rich still hide there money in other countries as well.

These people wouldn't have to hide the money if it wasn't so bad here

[VonMatterhorn]

You can't blame people for avoiding taxes when the government doesn't spend it responsibly. Remember the government is supposed to work for the people but nowadays it feels as if we work for them.

[Hitman21]

You can't blame people for avoiding taxes when the government doesn't spend it responsibly. Remember the government is supposed to work for the people but nowadays it feels as if we work for them.

Agreed. People have the right to hide money if the government is abusing it

[Andro]

So tax evasion is the way to become a high net worth 100k individual?

+1 It is the only way to become high net worth with 100k in liquid assets. Though I heard there are some downsides to dating when you are that rich...

[arm2000]

Agreed. People have the right to hide money if the government is abusing it
Of course not. People have the right to change the government if the current one is abusing money

[Heero01]

You can't blame people for avoiding taxes when the government doesn't spend it responsibly. Remember the government is supposed to work for the people but nowadays it feels as if we work for them.

LOL... It always amazes me how stupid people are. We love to fight to have less taxes, less government. In reality, 99% of people will never be able to take advantage of these benefits. How many of these ultra rich people do you think are posting on RFD?

We will never be as rich as these ppl so why do we defend them? People who have enough money to be able to hide money in other countries are rich, not middle class.

We need to go after these people! Even if you think the government is abusing your money do you think that the ultra rich hiding their money will help the rest of us? NO... Do you think the average middle class person has enough time/money to make it worth it to hide their money? No... only the rich do.

[VonMatterhorn]

LOL... It always amazes me how stupid people are. We love to fight to have less taxes, less government. In reality, 99% of people will never be able to take advantage of these benefits. How many of these ultra rich people do you think are posting on RFD?

We will never be as rich as these ppl so why do we defend them? People who have enough money to be able to hide money in other countries are rich, not middle class.

We need to go after these people! Even if you think the government is abusing your money do you think that the ultra rich hiding their money will help the rest of us? NO... Do you think the average middle class person has enough time/money to make it worth it to hide their money? No... only the rich do.
What benefits?

Just saying you can't blame people (rich or poor) for trying to avoid taxes when they don't see it being spent well. I don't know about you but I certainly don't like to throw money in a bottomless pit.

[Syne]

You're telling me if you had money you wouldn't try to keep as much of it as possible through any legal loophole available to you?

After I reached an amount of money where I couldn't possibly spend it in my lifetime, the whole idea of hoarding even more money in tax havens would strike me as somewhat unimportant.

[Syne]

IDRC if the rich are hiding their money. It's still not going to help having bad decisions made by our government.

It's also not going to cure cancer.. Wait, why are we making false equivalencies again?

[uber_shnitz]

After I reached an amount of money where I couldn't possibly spend it in my lifetime, the whole idea of hoarding even more money in tax havens would strike me as somewhat unimportant.
Well who dictates you can't? There's ridiculously expensive things out there and some people will buy them simply because they can (otherwise they wouldn't exist).

I'd blame the loophole laws that allow tax havens to be abused more than the people actually just playing the system.

[Syne]

Right, and everyone (including Buffet and Gates) is pretty much saying, 'fix the loopholes'. It's just not happening for whatever reason.

[Heero01]

What benefits?

Just saying you can't blame people (rich or poor) for trying to avoid taxes when they don't see it being spent well. I don't know about you but I certainly don't like to throw money in a bottomless pit.

LOL... you think that a person worth a couple million dollars, hiding their tax money will help you in ANY way?

Think of it this way: (lets assume we have a trash government)

1. We pay taxes (X) because we are not rich enough to hide our money
2. Rich person (who contributes alot to taxes) hides money (Y) because they feel it is being insufficient
3. Government now has only (X) to spend (efficently or not) rather then (X +Y).

You see what I mean now? you are claiming that people should be allowed to hide their money should they desire, when in reality 99% of us posting on this forum will NEVER BE RICH ENOUGH FOR IT TO BE WORTH IT... So essentially you are giving rich people permission to hurt the rest of us collectivly...

Sorry for my horrid explanation... Cant really explain it any better then that.

[Hitman21]

Of course not. People have the right to change the government if the current one is abusing money

Just remember that hiding the money offshore is perfectly LEGAL, there not breaking the law. There are probably people on rfd hiding money, where is the outrage toward them?

[dealstime]

It will slowly trickle down.Cannot understand this obsession with people hoarding money they never make use of.

[OMV]

Just remember that hiding the money offshore is perfectly LEGAL, there not breaking the law.

Hiding money offshore is not legal in Canada. You're supposed to declare foreign assets above $100k to the CRA in your tax return.

[Hitman21]

Hiding money offshore is not legal in Canada. You're supposed to declare foreign assets above $100k to the CRA in your tax return.

It should be legal though

[UrbanPoet]

I always thought super rich people found 100% legit/legal ways to do this.

[king_george]

I always thought super rich people found 100% legit/legal ways to do this.

A lot of posters can't distinguish between tax evasion and avoidance. They think that offshore holdings are evasion and therefore illegal. :facepalm:

I'd like to know if someone was going to go after someone, exactly what could be done since what they're doing is legal.