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How few of the 0.01% there really are

Here's an interesting story in the Guardian, ostensibly about offshore wealth, but more about wealth, and especially the wealthy.

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.

$21 trillion?! Even today, that's a lot of money! And capital doesn't "disappear" into the "cracks in the financial system" (indeed, one might even think the whole purpose of the financial system is to have such cracks). The capital goes somewhere and is invested in something by someone. The article doesn't say any of that -- in fact, the tax havens obfuscate capital flows -- but it does have other interesting things to say. For one thing, the Gini co-efficient that measures inequality, bad as it seems now, isn't nearly bad enough:

Inequality is widely seen as having increased sharply in many developed countries over the past decade or more – as described in a recent paper from the IMF, which showed marked increases in the so-called Gini coefficient, which economists use to measure how evenly income is shared across societies. ...

However, Henry's research suggests that this acknowledged jump in inequality is a dramatic underestimate. Stewart Lansley, author of the recent book The Cost of Inequality, says: "There is absolutely no doubt at all that the statistics on income and wealth at the top understate the problem."

The surveys that are used to compile the Gini coefficient "simply don't touch the super-rich," he says. "You don't pick up the multimillionaires and billionaires, and even if you do, you can't pick it up properly."

In fact, some experts believe the amount of assets being held offshore is so large that accounting for it fully would radically alter the balance of financial power between countries.

So, how many people own these assets?

In total, 10 million individuals around the world hold assets offshore, according to Henry's analysis; but almost half of the minimum estimate of $21tn – $9.8tn – is owned by just 92,000 people. And that does not include the non-financial assets – art, yachts, mansions in Kensington – that many of the world's movers and shakers like to use as homes for their immense riches.

92,000 people. That's not very many. There are not very many of the Shing,...

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Rangoon78's picture
Submitted by Rangoon78 on

What I learned on my vacation in lovely Lake Tahoe:

Nevada is on every list of the top tax havens.
http://www.buytahoehomes.com/tax-advantages.php

There's even a manual for tax evaders:

NEVADA, U. S. A.

Find the contact names, addresses, numbers and information for local government offices, banks, accountants, company formation services, investment and management companies, advisors, experts, maildrops, real estate agents and other useful local contacts in the THE OFFSHORE MANUAL & DIRECTORY
https://www.offshore-manual.com/224_4.html

So, smart money doesn't have to leave the country- a little history:

1930: George Whittell Jr. (who's family fortune came from ripping off new Californians during the gold rush) buys land which will eventually encompass 40,000 acres and 27 miles of the Nevada shore of Lake Tahoe. George lives in Woodside CA BUT claims Nevada residence. The crown jewel of his purchase, Incline Village, is now used bay many of California's wealthiest to avoid taxes:

smart money doesn't have to leave the country- a little history:

1930: George Whittell Jr. (who's family fortune came from ripping off new Californians during the gold rush) buys land which will eventually encompass 40,000 acres and 27 miles of the Nevada shore of Lake Tahoe.
Incline Village, the town on the Nevada side of the lake where Mr. Ellison has made a number of his buys, bears the nickname ‘Income Village’ for its wealthy residents and its reputation as a tax haven (Nevada has no personal income tax).
http://sierrafoothillsreport.com/2011/10/24/larry-ellison-now-snapping-u...

George lived in Woodside CA- BUT claims Nevada residence. The crown jewel of his purchase, Incline Village, is now used bay many of California's wealthiest to avoid taxes:

Incline Village, the town on the Nevada side of the lake where Mr. Ellison has made a number of his buys, bears the nickname ‘Income Village’ for its wealthy residents and its reputation as a tax haven (Nevada has no personal income tax).
http://sierrafoothillsreport.com/2011/10/24/larry-ellison-now-snapping-u...

blues's picture
Submitted by blues on

We don't need them for anything. They only start wars, economic depressions, and create mental illnesses.

Here's a good approach:

Re: Documentary on Eugene Debs (but how would it work?)
http://www.correntewire.com/comment/235933#comment-235933

They cause 100X more trouble than all of the 2,000,000 criminals we have in prisons.

Wealth is a very dangerous sickness, and the wealthy need to be put in institutions.