Of taxes, tax avoidance, and socialist greed

The BBC reported yesterday that the Tax Justice Network is at it again.

A global super-rich elite had at least $21 trillion hidden in secret tax havens by the end of 2010, according to a major study.

The figure is equivalent to the size of the US and Japanese economies combined.

The Price of Offshore Revisited was written by James Henry, a former chief economist at the consultancy McKinsey, for the Tax Justice Network.

. . .

Mr Henry said his $21tn is actually a conservative figure and the true scale could be $32tn. A trillion is 1,000 billion.

Mr Henry used data from the Bank of International Settlements, International Monetary Fund, World Bank, and national governments.

His study deals only with financial wealth deposited in bank and investment accounts, and not other assets such as property and yachts.

The report comes amid growing public and political concern about tax avoidance and evasion. Some authorities, including in Germany, have even paid for information on alleged tax evaders stolen from banks.

. . .

Mr Henry said that the super-rich move money around the globe through an "industrious bevy of professional enablers in private banking, legal, accounting and investment industries.

"The lost tax revenues implied by our estimates is huge. It is large enough to make a significant difference to the finances of many countries.

"From another angle, this study is really good news. The world has just located a huge pile of financial wealth that might be called upon to contribute to the solution of our most pressing global problems," he said.

There's more at the link.

Note the arrogance of the TJN's researcher.  No sooner does he 'uncover' that rich people allegedly have all these trillions of dollars squirreled away somewhere than he blithely assumes it can be taken away from them and used for 'the solution of our most pressing global problems'.  The fact that it's someone else's property doesn't bother him in the least.  Can anyone say 'socialism'?  Can anyone say 'Marx'?  I figured you could . . .

The Tax Justice Network says of itself:

The Tax Justice Network promotes transparency in international finance and opposes secrecy. We support a level playing field on tax and we oppose loopholes and distortions in tax and regulation, and the abuses that flow from them. We promote tax compliance and we oppose tax evasion, tax avoidance, and all the mechanisms that enable owners and controllers of wealth to escape their responsibilities to the societies on which they and their wealth depend.

Again, more at the link.  Bold print is my emphasis.  If that doesn't remind you of President Obama's fatuous claim last week that entrepreneurs and businessmen didn't become successful from their own efforts, it should!  It's drawn from precisely the same sort of ideological background.

I'm not surprised that wealthy people are seeking to protect their assets from a rapacious taxman.  As Ari Fleischer pointed out in the Wall Street Journal yesterday:

... consider the top 20% of [US] income earners (over $74,000). They make 50% of the nation's income but pay nearly 70% of all federal taxes.

The remaining 30% of the tax burden is borne by 80% of the taxpayers, those who make less than $74,000. In short, this group's share of taxes paid, 30%, is lower than the share of income they earn, 50%.

Yet President Obama says that "for some time now, when compared to the middle class," the wealthy "haven't been asked to do their fair share."

He's right that the system isn't fair, but not because the top 1% pay too little. It is because they pay too much.

More at the link.

The only surprising thing about the report is that it couldn't estimate with any accuracy precisely how much has been hidden from taxation.  (Then again, if I were rich enough to be worried about tax [sadly, I'm not], I'd make damn sure the taxman - not to mention nosy researchers - couldn't find it at all!)





Peter