THE PRICE OF OFFSHORE REVISITED
NEW ESTIMATES FOR MISSING GLOBAL PRIVATE
WEALTH, INCOME, INEQUALITY, AND LOST TAXES (Tax Justice Network)
By 2010, global private banks held $12.06 billion of private crossborder wealth under their management. This is consistent with $21-32 trillion in offshore accounts by 2010. The top ten banks holding this wealth have not changed much over the years. Usual suspects - UBS and Credit Suisse are the top two. Barclays, the ultra private Geneva bank Pictet, and BankAmerica, by way of its acquistion of Merrill. The top ten banks' offshore wealth controlled 51% of this $12 billion. Will Congress act against this with banking reform and reporting?
Incredible documentation, fascinating peek into this dark world and in need of accountants' comments. Long.
Will our elected officials address this loss of tax revenue from the U.S.?
NEW ESTIMATES FOR MISSING GLOBAL PRIVATE
WEALTH, INCOME, INEQUALITY, AND LOST TAXES (Tax Justice Network)
The definition of victory for this paper is to review and improve upon existing estimates of the size, growth and distribution of untaxed private wealth protected and serviced by the global offshore industry. This is necessarily an exercise in night vision. The subterranean system that we are trying to measure is the economic equivalent of an astrophysical black hole.
KEY FINDINGS
Overall Size
A significant fraction of global private financial wealth by our estimates, at least $21 to $32 trillion as of 2010 has been invested virtually tax free through the worlds still
expanding black hole of more than 80 offshore secrecy jurisdictions. We believe this
range to be conservative, for reasons discussed below.
The study estimated that during the period 1970 to 2007 at least $150- $200 billion of unrecorded private capital flight flowed out of the developing world each year.
Using conservative assumptions about reinvestment rates and investment yields, these flows suggested that accumulated offshore wealth stock owned by developing country residents was worth at least $6.2 trillion by 2007.
This included only wealth from developing countries, which is at most 25 to 30 percent of all offshore private wealth. This large figure for developing country wealth alone implied that total offshore private wealth was much higher than other estimates, and Remember: this is just financial wealth. A big share of the real estate, yachts, racehorses, gold bricks and many other things that count as non-financial wealth are also owned via offshore structures where it is impossible to identify the owners.
These are outside the scope of this report.
On this scale, this offshore economy is large enough to have a major impact on
estimates of inequality of wealth and income; on estimates of national income and debt
ratios; and mos importantly to have very significant negative impacts on the domestic tax bases of key source countries (that is, countries that have seen net unrecorded private capital outflows over time).
...developing countries might be losing as much as $120-$160 billion per year in lost tax revenue on the interest and other income generated by all this unreported anonymous wealth more than the entire global total of foreign aid from OECD countries.
By 2010, global private banks held $12.06 billion of private crossborder wealth under their management. This is consistent with $21-32 trillion in offshore accounts by 2010. The top ten banks holding this wealth have not changed much over the years. Usual suspects - UBS and Credit Suisse are the top two. Barclays, the ultra private Geneva bank Pictet, and BankAmerica, by way of its acquistion of Merrill. The top ten banks' offshore wealth controlled 51% of this $12 billion. Will Congress act against this with banking reform and reporting?
Incredible documentation, fascinating peek into this dark world and in need of accountants' comments. Long.
Will our elected officials address this loss of tax revenue from the U.S.?
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