Monday, 16 June 2014


UPDATE - 17th Oct 2014

Monsieur Professor Piketty is right. Despite being hammered by an ill-prepared, economically illiterate capitalist lackey in a Spring 2014 Saturday issue of the once reliable Financial Times, A recent report by no less than a servile servant of the super-offshore-rich, Credit Suisse, confirms Piketty's main statistics. The Credit Suisse global wealth report finds that 35 million damned souls being 0.7% of adults own $116 trillion; 373 million souls being 8% of adults own $108 trillion; 1 billion souls, with a slightly better chance of getting to Heaven, 21.5% of adults, share out $31 trillion - and the remaining $7.6 trillion is fought over by the rest of mankind 3,282 million  struggling adults (who will almost certainly die horribly, but go to Heaven). 

One of the greatest concentrations of these super-rich is to be found in London. The UK is storming ahead of most other OECD nations in ever widening the already unsustainable wealth gap - as Piketty foresaw. But then Britain - Great Britain - The British Empire did invent tax-havens, made a bundle out of slavery and has trained its unwashed huddled uncomplaining starving masses to tug the forelock, bow the knee, bend  the humble head and to slavishly admire the aristocracy. 

Global Wealth Report 2014

Global Wealth Report 2014


The True Cost of Hidden Money

A Piketty Protégé’s Theory on Tax Havens

GABRIEL ZUCMAN is a 27-year-old French economist who decided to solve a puzzle: Why do international balance sheets each year show more liabilities than assets, as if the world is in debt to itself?
Over the last couple of decades, the few international economists who have addressed this question have offered a simple explanation: tax evasion. Money that, say, leaves the United States for an offshore tax shelter is recorded as a liability here, but it is listed nowhere as an asset — its mission, after all, is disappearance. But until now the economists lacked hard numbers to confirm their suspicions. By analyzing data released in recent years by central banks in Switzerland and Luxembourg on foreigners’ bank holdings, then extrapolating to other tax havens, Mr. Zucman has put creditable numbers on tax evasion, showing that it’s rampant — and a major driver of wealth inequality.

Mr. Zucman estimates — conservatively, in his view — that $7.6 trillion — 8 percent of the world’s personal financial wealth — is stashed in tax havens. If all of this illegally hidden money were properly recorded and taxed, global tax revenues would grow by more than $200 billion a year, he believes. And these numbers do not include much larger corporate tax avoidance, which usually follows the letter but hardly the spirit of the law. According to Mr. Zucman’s calculations, 20 percent of all corporate profits in the United States are shifted offshore, and tax avoidance deprives the government of a third of corporate tax revenues. Corporate tax avoidance has become so widespread that from the late 1980s until now, the effective corporate tax rate in the United States has dropped from 30 percent to 15 percent, Mr. Zucman found, even though the tax rate hasn’t changed.





TJN has explained why Zucman's estimates are too low - for a basic summary of it, see footnote 1 on p11 here:


Hi - I think Gabriel Zucman's guesstimate of $7.6 trillion offshore personal wealth, if it includes corporate assets, is out of step with the higher estimates. My first searches of OECD statistics, found 2007 estimates of $11 trillion cash "offshore". The estimates rose to $18 trillion and then over the 2009-11 years to $21 trillion (the $3 trillion "lost" by London and Wall St). The highest estimate I've seen is this one, $32 trillion, by James S Henry.  The OECD earlier estimates seem to have been airbrushed from their websites. It is difficult to know if estimates are "cash" only or include "assets" - $32 trillion equates to 80 million 10 year jobs; globally, this seems to be logical - see slides linked below. - Noel Hodson.


Studies by the OECD, Paris and one by Wall Street, McKinsey economist James S Henry show there is $32 trillion (80 million global jobs for ten years) tax-unpaid money offshore. The global total grows by $1 trillion annually. The UK’s share of this vast hoard is about $3 trillion (8 million UK jobs) - $16 trillion has been siphoned from the US economy. 


Tax avoidance ‘a threat to democracy’

Tax avoidance ‘a threat to democracy’ Guardian – 13 February 2013.

The OECD says: "Figures show that, in 2010, Barbados, Bermuda and the British Virgin Islands received more foreign direct investment than Germany or Japan.
Not only do offshore havens act as a base for multinationals to deposit funds, the funds are recycled for further investment into developing nations. The British Virgin Islands was the second largest investor into China in 2010 after Hong Kong. The BVI accounted for 14% of all investments into China compared with 45% from Hong Kong. The US trailed with 4% of the total investment into China.
Cyprus is the top investor into Russia, with 25% of all foreign investment, while Mauritius accounts for a quarter of all foreign investment into India."
The ease with which 'big guys' shift profits to offshore havens shows governments need to step up their efforts - think-tank warns.

...locked $21 trillion in tax-havens (OECD 2011 estimate),



Fighting tax evasion
Tax avoidance and tax evasion threaten government revenues. The US Senate estimates revenue losses from tax evasion by U.S.-based firms and individuals at around 100 billion dollars a year. In many other countries, the sums run into billions of euros. This means fewer resources for infrastructure and services such as education and health, lowering standards of living in both developed and developing economies.

Tax transparency and the fight against cross-border tax evasion have been key topics at G20 Summits in WashingtonLondon,Pittsburgh and Toronto.
The OECD is helping to develop exchange of information networks through the Global Forum on Transparency and Exchange of Information for Tax Purposes

>> overview of the OECD's work on tax evasion (PDF, 790KB)
>> Latest progress made on exchange of information


In 2009, The OECD Paris, estimated there was $18 trillion off-shore. In July 2012, The Observer newspaper (UK) commissioned experts who estimated there is now $21 trillion in tax-havens. That means that every year, one-trillion US dollars is hidden in tax-havens. Most of that $1 trillion is granted tax-relief by the nations that lose it.  One trillion dollars siphoned from our economies is 28 million jobs lost, every year.  $21 trillion invested back in the homelands would create 588 million jobs – and pay-off every deficit in the World

Tuesday, 8 May 2012


The Guardian, my favourite independent newspaper, possibly the best newspaper in the world, reports the OECD has recalculated bank deposits in Tax Havens at $2.7 trillion – down from the 2009 estimated $11 to $18 trillion. The OECD presented the new numbers to the G20 meeting inCannes. Does this dramatic 75% fall in (reports of) tax-free cash sloshing around the globe mean we should abandon attempts to repatriate the funds and invest them into industries in the originating nations?

SLIDE 11 - The $18 trillion Tax- Haven cash is 30% of the annual global $60 trillion production. The GGDP surplus p.a. is about 1% - for 30 years siphoned to tax-havens (30 years x 1% = 30%).
No – actually. In 2010, from 2009 statistics (we all know that all statistics are wrong, but they are all we have) in Money-Wars (slide 11 of 23) we calculated that the OECD’s $18 trillion made sense, and it forms a part of the better documented $82 trillion in the Bond Markets (the Free Markets), that slosh around the globe – ever hopeful of finding a totally safe nation that can be fooled into being on the edge of bankruptcy and thus have to pay 7.5% for the next 50 years to Bond holders.

The sensible logic is that the annual surpluses from our national economies, about 1% a year, for the past 30 years have been siphoned off-shore – with tax relief given in the home nations.  The 1% surplus is the liquidity of any economy – which has gone missing and been siphoned away.

It is in the annual siphoning paperwork (transfer pricing, officers, controllers, resident status) that long established tax laws are most likely to have been breached, creating Back-Duty tax cases, which assess the tax-relief granted, the ongoing unpaid taxes, plus compound interest, plus penalties – that in most cases add up to the total capital siphoned out.  

So – the apparent 75% reduction actually reflects that funny-money is constantly shifting from tax-havens to Bond, Shares & Commodity Markets, to on-shore banks, etc. The $18 trillion siphoned in the past 30 years, could and should be subjected to forensic audits – and repatriated. The secret and intelligence services could easily track it down, as few bank computer operators will risk making fraudulent entries to obscure the trails.

Another Guardian article, about Facebook, tells us 2 billion people are on-line, and that 1 in 3 use Facebook. Maybe Facebook can track the Funny-Money.
Laws can be changed. Thomas Piketty asks how things can be changed - to prevent global economic calamity. Here's how:-

1) Repatriate the $32 trillion from 70 tax-havens and re-boot the world economy.
2) Adopt BIRTHRIGHT and spread the wealth. Pensions from birth.

3) Bring back 1950's Surtax and Super-tax rates of up to 98% on immense incomes.
Or - we can suffer the bloodiest social revolution of all time. The end of days.

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