Home > inequality, taxes, upward income redistribution > Where has all the surplus gone?

Where has all the surplus gone?

from David Ruccio

Where has all the surplus gone? 

According to a new report for the Tax Justice Network, an extraordinarily large portion of the surplus has been captured and transferred abroad to various tax havens.

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.

I’ll have more to say once the actual report is released. . .

  1. John Campbell
    July 27, 2012 at 6:42 am

    Gee, Switzerland and the Caymens don’t even make the cut! Has the Wall St Journal had an editorial pointing out that is is all caused by unfair tax laws in Europe and the US?

    I guess there is no way to guess where the money comes from.

    • July 27, 2012 at 6:53 am

      The Wall Street Journal is right but its readers would most certainly not approve of tax laws that were in accordance with the principles of natural justice.

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