7.6 trillion stashed in tax havens, equaling 8% of world's personal financial wealth
"By analyzing data released in recent years by central banks in Switzerland and Luxembourg on foreigners’ bank holdings, then extrapolating to other tax havens, Mr. Zucman has put creditable numbers on tax evasion, showing that it’s rampant — and a major driver of wealth inequality."
Gabriel Zucman estimates: - $7.6 trillion is stashed in tax havens, equalling 8% of the world's personal financial wealth. - Global revenues would grow by more than $200 billion annually if all of this illegally hidden money were recorded and taxed - Zucman believes that 20% of all corporate profits in the US are shifted offshore - Tax avoidance deprives the government of 1/3 of corporate tax revenues. This corporate tax avoidance has become so widespread that from the late 1980s until now the effective corporate tax rate in the United States has dropped from 30 percent to 15 percent even though the tax rate hasn’t changed. *** If offshore assets were properly measured, American indebtedness would fall from 18% of the GDP to 9%
Since less wealthy people continue paying taxes while large corporations and the rich engage in offshore tax evasion, this deepens the wealth inequality.
"What’s beyond question is that there is no economic, political or moral justification for tax evasion — it exists only because of the political influence that wealth buys. A society that fails to fight widespread tax evasion proclaims its own corruption."
Gabriel Zucman is a 27 year-old French economist, assistant professor at the London School of Economics, and author of "The Missing Wealth of Nations." He is mentored by Thomas Picketty of the Paris School of Economics.
Jacques Leslie, “The True Cost of Hidden Money: A Piketty’s Protégé’s Theory on Tax Havens,” New York Times Opinion Pages, June 15, 2014, accessed July 8, 2014, http://www.nytimes.com/2014/06/16/opinion/a-piketty-proteges-theory-on-t....