The chasm separating the uber-wealthy from the rest of the world may be wider than most people think, according to a new report from left-leaning British group Tax Justice Network, which says there is at least $21 trillion -- and possibly as much as $32 trillion -- sitting in untaxable offshore accounts.
That’s roughly the size of the American and Japanese economies combined, according to the report from James Henry, a former chief economist at McKinsey & Co. And the figure only includes financial wealth, not real estate, yachts or other assets held abroad.
By conservative estimates, the amount of offshore wealth held in places such as the Cayman Islands could be as high as $32 trillion, according to the report. In 2005, the group pegged tax havens – which it also refers to as “secrecy jurisdictions” – as holding about $11.5 trillion.
In 2010, the world’s top 50 private banks managed more than $12.1 trillion in cross-border funds, up from $5.4 trillion in 2005. UBS, Credit Suisse and Goldman Sachs handled the largest share.
The offshore wealth belongs to a group of 10 million people, according to the report, which is based on data from the World Bank, the International Monetary Fund, the United Nations and more.
Many, however, are skeptical that what Henry describes as a “black hole” is actually quite so deep.
If it were, “you would expect the havens to be more conspicuously wealthy than they are,” tax expert John Whiting told the BBC.
"I cannot disprove the figures at all, but they do seem staggering,” said Whiting, tax policy director at the Chartered Institute of Taxation in London. “If the suggestion is that such amounts are actively hidden and never accessed, that seems odd - not least in terms of what the tax authorities are doing."
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