The world’s wealthiest people are hiding trillions of dollars in offshore tax havens to avoid paying their fair share of taxes, reported the Guardian. New research found that the amount of money hidden around the world is larger than what’s in the American economy.
James Henry, economist and researcher with the Tax Justice Network (TJN), conducted a study of data from the Bank for International Settlements (BIS), the International Monetary Fund (IMF), and several private sector analysts. He found that between $21 trillion and $32 trillion is hidden in offshore accounts. Henry asserted that such a large amount of hidden money influences and perpetuates worldwide income inequality.
“This offshore economy is large enough to have a major impact on estimates of inequality of wealth and income; on estimate of national income and debt ratios; and – most importantly – to have very significant negative impacts on the domestic tax bases of ‘source’ countries,” said Henry.
According to Henry’s research, approximately 10 million individuals around the world have money hidden in offshore tax havens in order to dodge their homelands’ tax laws. Even within that group, most of the money is concentrated among a small minority of ultra-rich people. Out of 10 million people, 92,000 own at least half of the total amount of hidden money. On average, the tax rate on that money is only 3 percent each year. A 30 percent tax rate would generate $189 billion off of that hidden money.
Tax dodging isn’t just an American problem; it’s worldwide. The world’s wealthiest people want to take everything, but they don’t want to pay their share.