Some staggering figures on tax evasion were revealed by British economist James Henry in a report titled “The Price of Offshore Revisited.”
Henry, a former chief economist for the consulting firm McKinsey & Co., determined that at least $21 trillion worldwide is being stashed in tax havens such as Switzerland, the Cayman Islands, Luxembourg, Hong Kong and Singapore. The study — which compiled data from the World Bank, the International Monetary Fund, the United States and central banks — said $21 trillion is a conservative estimate, and the actual figure could be as high as $32 trillion. By comparison, the entire annual U.S. economy totals roughly $15 trillion.
Equally frustrating is the relatively small number of tax cheats responsible for this “huge black hole in the world economy,” as Henry described it. These offshore assets are held by fewer than 10 million people worldwide, and $9.8 trillion is held by the wealthiest 100,000 — or 0.001 percent of the world’s population.
The banks that handle much of this activity have been hiding in plain sight — and could be held responsible, if doing so became a political priority.
In an era when many governments worldwide are resorting to painful tax hikes and budget cuts to balance their budgets, it’s unconscionable that a small segment of the population can game the system using methods to which the average citizen doesn’t have access.
The Oneonta (N.Y.) Daily Star (July 29)