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

Exploiting gaps in global tax rules.

July 21, 2012, The Guardian (One of the UK's leading newspapers)

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.

"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 – most importantly – to have very significant negative impacts on the domestic tax bases of 'source' countries," Henry says. John Christensen of the Tax Justice Network [commented]

"Inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people. This new data shows the exact opposite has happened: for three decades extraordinary wealth has been cascading into the offshore accounts of a tiny number of super-rich."

In total, 10 million individuals around the world hold assets offshore, according to Henry's analysis; but almost half of the minimum estimate of $21tn – $9.8tn – is owned by just 92,000 people. Note: Henry's report, entitled The Price of Offshore Revisited, is available here.

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National Debt? No Such Thing

GOP presidential candidate Mitt Romney is among
the super rich with money in offshore accounts.
(photo: AP)

By Carl Gibson, Reader Supported News

28 July 12

Reader Supported News | Perspective
magine sitting at the kitchen table, stressing out over your family's finances. Between the student loan debt, the credit card debt, the car loan, the mortgage, the phone bill, the groceries, electricity and the water, you only have so much in your bank account to cover a few of those things. To avoid defaulting on your debt or having your car repossessed, you'll either have to forgo electricity for your home, or you can simply collect the debt owed to you by your rich neighbors, all of which totals more than you would make in 10 years. Would you shut off your lights, or collect what you're owed and settle all of your debt?

Any politician who bemoans the national debt, whether they be American, Greek, Spanish or otherwise, is lying to you if they blame anyone but the richest 0.001% for the country's massive debt. Because the richest 0.001% have anywhere between $21 trillion and $32 trillion stashed in overseas bank accounts simply to avoid paying their fair share of taxes. It's a number that's simply beyond comprehension. Even if someone had spent a million dollars a day since Jesus was born, they would have only spent $700 billion by today, just $0.7 trillion.  READ MORE