At least USD 21 trillion of private financial wealth, unreported, was owned by wealthy individuals through tax havens at the end of 2010.
A sum equivalent to the combined size of the economies of the United States and Japan. This is what the report says “The Price of Offshore Revisited” by James Henry, a former chief economist at McKinsey on behalf of Tax Justice Network.
Although the tax expert and adviser to the British government, John Whiting, does not believe the amount is hidden so great, it clearly indicates that there is large amounts of money hidden and wondered what in fact is . That used data from the BIS (Bank of International Settlements), the International Monetary Fund (IMF), World Bank and national governments, Henry James said the $ 21 trillion is actually a conservative figure and that the true extent could reach USD 32 trillion. For his study focused only on financial wealth deposited in bank accounts and investment, and not other assets such as land ownership and yachts.
This report comes amid growing concerns arise about tax avoidance and evasion by countries like Germany, Britain, France, the USA and India. Henry James said that the super-rich transfer money worldwide through a swarm of professionals “private banking”, lawyers and accountants, among others in the industry.
“The revenue losses implied by our estimates are enormous. They are large enough to make a significant difference to the finances of many countries. We have identified a huge share of financial wealth that could be called upon to help solve our most pressing global problems, “he says.
The report also highlights the impact of this on the balance sheets of 139 developing countries. The money held in tax havens is put out of reach of local tax authorities. James Henry believes that since the 70’s, the wealthiest citizens of these countries have amassed between USD 7.3 to USD 9.3 trillion of offshore wealth. This private wealth held abroad represents “a huge black hole in the global economy,” said Henry James.
In late 2010, the top 50 private banks were managing on their own collectively more
USD 12.1 trillion in cross-border investments in assets for private clients. The three private banks handling the more assets abroad are UBS, Credit Suisse and Goldman Sachs. Less than 100 000 people worldwide have approximately $ 9.8 trillion in wealth held offshore.