The scandal surrounding Facebook’s relationship with Cambridge Analytica, the election data company previously associated with former Trump campaign Chairman Steve Bannon, dominates the media in the US and Britain.
Who avoids the most tax and what does that mean for inequality?
These were the questions asked by two National Bureau of Economic Research working papers submitted this month (Tax Evasion and Inequality and Who Owns the Wealth in Tax Havens?). Both papers are available publicly here.
- The ultra-rich avoid the most tax
The ultra-rich, people whose net worth is more than $45 million, are ten times more likely to evade taxes than the average citizen, according to the research.
That means the ultra-rich have worked out how to avoid paying about 30 percent of their personal income and wealth taxes.
And it probably doesn’t stop there, with the authors suggesting that “evasion among the wealthy may be even higher” because their research was based on Scandinavian countries where social trust is high, corruption low and respect for the rule of law strong.
The research also found that offshore wealth increases the “top 0.1 percent wealth share from 8 percent to 10 percent” when looking at Norway specifically. And for top 0.01 percent “taking tax evasion into account increases their wealth by a third.”
- The ultra-rich are more likely to use offshore accounts
The likelihood of Scandinavians in the bottom 99 per cent of wealth share hiding their assets in HSBC accounts was “negligible,” according to research based on ICIJ’s Swiss Leaks.
But the probability rises to 1 percent among the richest 0.01 percent.
This chart shows the probability of owning an unreported HSBC account by wealth groups. (The first group [P90-P95] represents households worth less than $900,000 and the last the top 0.01 percent who are worth $44.5 million.)
“The gradient is notable too: top 0.01 percent households are 13 times more likely to hide assets at HSBC than households in the bottom half of the top 1 percent,” they wrote.
- Hardly anyone except the ultra-rich use offshore accounts
The use of offshore accounts “steeply rises with wealth,” according to research based on ICIJ’s Panama Papers.
This charts shows the probability of owning a Mossack Fonseca offshore shell company significantly increased for the top 0.01 percent of Norway and Sweden’s population.
“The use of tax havens appears more concentrated in the Panama Papers than in the HSBC leak,” the authors wrote.
The researchers also suggested one reason very few households outside the 0.01 percent in the Panama Papers used shell companies to conceal wealth is because it is a “more sophisticated” strategy than owning offshore bank accounts.
“Both techniques are often combined, but the wealthiest tax evaders might be more likely to combine offshore accounts with shell companies, when less wealthy tax evaders may be relatively more likely to own offshore accounts directly in their own names.”
- Tax havens hold 10 percent of global GDP
In the second study, the authors analyzed the global amount of wealth in tax havens.
“We find that while about 10 percent of world GDP is held in tax havens globally, this average masks a great deal of heterogeneity.”
For example, Russia (60 percent), Europe (15 percent) and other nations hold a significant chunk of their GDP offshore, whereas Scandinavian countries own just a few percent of GDP.
- Offshore wealth is shifting from Switzerland to Asia
The research found the size of this wealth was “not easily explained by tax or institutional factors” but instead correlated more closely with a country’s proximity to Switzerland, the presence of natural resources and political/economic instability.
However, the times might be changing, with the research also discovering wealth was growing in tax havens based in Asia – and mainly in Hong Kong – with offshore accounts held in Switzerland declining since the 2008 financial crisis.
The authors predicted offshore assets in Hong Kong have grown six-fold between 2007 and 2015 with the country now ranked second behind Switzerland for tax havens.
- Countries with more offshore wealth also use more tax havens
The next chart shows the number of unique owners of shell companies created by Mossack Fonseca in each country before 2006 and active in 2007, using Panama Papers data.
“There are strong similarities between the amount of offshore wealth we estimate and the use of tax havens as revealed by the Panama Papers,” the authors said.
Russia is one such country with a total of 2071 unique shells. The authors also highlighted that China is over-represented in the data given estimates of how much Chinese wealth is offshore. They suggest this could be because estimates of China’s offshore wealth are low, or that Chinese use shell companies for purposes other than concealing wealth.
- Offshore wealth can substantially increase inequality
So what does that all mean for equality?
Including offshore assets generally increased the 0.01 percent’s wealth share substantially (even in the law abiding Scandinavian countries).
The effect in some countries is much worse than others. In the United Kingdom, Spain and France offshores assets accounted for between 30 to 40 percent of the 0.01 percent’s wealth. In Scandinavia, however, their share of wealth only increases by about 1 percent.
Read more about the impact from ICIJ’s investigations, and find out how you can support ICIJ’s work
Today, May 1st 2017, the world labor movements commemorate once again their tangible contribution to our collective development as a human species. This is also the day when they blow their horns on the massive inequality and the continued exploitation of the labor force. Continue reading May 1st: The Day Slavery System Transferred from Monarchies to the Corporations
Newly declassified documents from the Reagan presidential library help explain how the U.S. government developed its sophisticated psychological operations capabilities that – over the past three decades – have created an alternative reality both for people in targeted countries and for American citizens, a structure that expanded U.S. influence abroad and quieted dissent at home. Continue reading How US Flooded the World with Psyops
There are early disruptions against Trump’s peaceful engagement with Russia, aside from the protracted protests of virtually non-issue subjects. Continue reading Is Trump Being Sabotaged By The Pentagon?
Mass Mind-kontrol — it’s been going on since the time of Nimrod and ancient Babylonia. And it’s sinister and evil beyond words and description. Since Roswell it has taken a new sinister turn that defies imagination.
Headline grabbing events rarely articulate the involvement and culpability of the 1%ers of our society. They are off-limits to prying eyes, by default.
Even so, the top hierarchy of that 1%ers need to assign specific tasks of global import to a loyal and able lieutenant for purposes of interfacing with the pyramidal system of cartels that they themselves created for us.
Surely, there are many ways to hack the elections, whether electronic or otherwise.
For manual elections, vote buying and physical intimidation are just some of them.
Is Donald Trump really wants to change policies, or just advocating a different management style?
This the big question that Ron Paul asks of Trump whom he thinks is the real establishment’s candidate this time around.
It used to be that the so-called economic hitmen were only targeting other countries outside of the West, but as these usual targets are slowly waking up to the scheme and started resisting the machinations, not without risk of course, those same economic hitmen are now targeting their own countries, too.
When World War 2 ended everybody celebrated the fall of the Nazis only to find later on that their very country is occupied and ruled by Nazi agents, e.g. George HW Bush, George W. Bush, Jr., Henry Kissinger, Zbigniew Brzezinski, et.al.
- FBI Doc Confirms Hitler Fled to Argentina in 1945
- Merkel is No Angel But a Hitler
- Bush Family Treason
This is now the case with the European Union that behaves more like the collapsed Soviet Union.
Nuclear powered BRICS countries are testing their ballistic missile systems as well as Japan and the United States in almost the same time as terror attacks from Paris to Mali happened.
Special Report: In the 1980s, the Reagan administration pioneered “perception management” to get the American people to “kick the Vietnam Syndrome” and accept more U.S. interventionism, but that propaganda structure continues to this day getting the public to buy into endless war, writes Robert Parry.
by Charles Hugh Smith
When the citizenry cease to believe the lies, the nation suffers a nervous breakdown.
Last week I used the phrase National Nervous Breakdown without clarifying its meaning. (The War on Our Intuition That Something Is Fundamentally Amiss)
Continue reading National Nervous Breakdown
Million morons march for big lies & genocide
Call them sheeple. Lemmings. Zombies. New World Order mind control slaves.
Whatever you call them, the drooling dimwits chanting “we are Charlie” are the all-time greatest argument for Rockefeller-style eugenic euthanasia. (Which, incidentally, should start with the Rockefellers.)
Continue reading “#Je suis brainwashed”