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Mr. Gibs    3,865
A global super-rich elite has exploited gaps in cross-border tax rules to hide an extraordinary ?13 trillion ($21tn) of wealth offshore ? as much as the American and Japanese GDPs put together ? according to research commissioned by the campaign group Tax Justice Network.

James Henry, former chief economist at consultancy McKinsey and an expert on tax havens, has compiled the most detailed estimates yet of the size of the offshore economy in a new report, The Price of Offshore Revisited, released exclusively to the Observer.

He shows that at least ?13tn ? perhaps up to ?20tn ? has leaked out of scores of countries into secretive jurisdictions such as Switzerland and the Cayman Islands with the help of private banks, which vie to attract the assets of so-called high net-worth individuals. Their wealth is, as Henry puts it, "protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy". According to Henry's research, the top 10 private banks, which include UBS and Credit Suisse in Switzerland, as well as the US investment bank Goldman Sachs, managed more than ?4tn in 2010, a sharp rise from ?1.5tn five years earlier.

The detailed analysis in the report, compiled using data from a range of sources, including the Bank of International Settlements and the International Monetary Fund, suggests that for many developing countries the cumulative value of the capital that has flowed out of their economies since the 1970s would be more than enough to pay off their debts to the rest of the world.

Oil-rich states with an internationally mobile elite have been especially prone to watching their wealth disappear into offshore bank accounts instead of being invested at home, the research suggests. Once the returns on investing the hidden assets is included, almost ?500bn has left Russia since the early 1990s when its economy was opened up. Saudi Arabia has seen ?197bn flood out since the mid-1970s, and Nigeria ?196bn.

"The problem here is that the assets of these countries are held by a small number of wealthy individuals while the debts are shouldered by the ordinary people of these countries through their governments," the report says.

The sheer size of the cash pile sitting out of reach of tax authorities is so great that it suggests standard measures of inequality radically underestimate the true gap between rich and poor. According to Henry's calculations, ?6.3tn of assets is owned by only 92,000 people, or 0.001% of the world's population ? a tiny class of the mega-rich who have more in common with each other than those at the bottom of the income scale in their own societies.

"These estimates reveal a staggering failure: inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people," said John Christensen of the Tax Justice Network. "People on the street have no illusions about how unfair the situation has become."

TUC general secretary Brendan Barber said: "Countries around the world are under intense pressure to reduce their deficits and governments cannot afford to let so much wealth slip past into tax havens.

"Closing down the tax loopholes exploited by multinationals and the super-rich to avoid paying their fair share will reduce the deficit. This way the government can focus on stimulating the economy, rather than squeezing the life out of it with cuts and tax rises for the 99% of people who aren't rich enough to avoid paying their taxes."

Assuming the ?13tn mountain of assets earned an average 3% a year for its owners, and governments were able to tax that income at 30%, it would generate a bumper ?121bn in revenues ? more than rich countries spend on aid to the developing world each year.

Groups such as UK Uncut have focused attention on the paltry tax bills of some highly wealthy individuals, such as Topshop owner Sir Philip Green, with campaigners at one recent protest shouting: "Where did all the money go? He took it off to Monaco!" Much of Green's retail empire is owned by his wife, Tina, who lives in the low-tax principality.

A spokeswoman for UK Uncut said: "People like Philip Green use public services ? they need the streets to be cleaned, people need public transport to get to their shops ? but they don't want to pay for it."

Leaders of G20 countries have repeatedly pledged to close down tax havens since the financial crisis of 2008, when the secrecy shrouding parts of the banking system was widely seen as exacerbating instability. But many countries still refuse to make details of individuals' financial worth available to the tax authorities in their home countries as a matter of course. Tax Justice Network would like to see this kind of exchange of information become standard practice, to prevent rich individuals playing off one jurisdiction against another.

"The very existence of the global offshore industry, and the tax-free status of the enormous sums invested by their wealthy clients, is predicated on secrecy," said Henry.

Source: Guardian

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thealexweb    204

These micro countries should be given an ultimatium, hand back the money and change their ways or face military action, I'm usually against violence but it seems its the only way to stop them.

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Daveski    28

"The problem here is that the assets of these countries are held by a small number of wealthy individuals while the debts are shouldered by the ordinary people of these countries through their governments," the report says.

Have you read this Cameron???

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MightyJordan    7,906

Have you read this Cameron???

I bet he has, and he's ignoring it, because his party is mainly funded by that money. Hence why he's not closing up the tax loopholes that were exposed when Jimmy Carr (along with many other people) was caught using them (because his family's money comes from the same, in his words, "immoral" methods), and also why he's doing absolutely nothing to prevent the banking industry continuing to run riot with our money (which was started back in the 80s when Cameron's idol, Margaret Thatcher, along with Ronald Reagan, deregulated the banking industries on both sides of the Atlantic, and so, we're all paying for it today with the recession).

For comparison's sake...

487220_4330111740218_417603190_n.jpg

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Daveski    28

I bet he has, and he's ignoring it, because his party is mainly funded by that money. Hence why he's not closing up the tax loopholes that were exposed when Jimmy Carr (along with many other people) was caught using them (because his family's money comes from the same, in his words, "immoral" methods), and also why he's doing absolutely nothing to prevent the banking industry continuing to run riot with our money (which was started back in the 80s when Cameron's idol, Margaret Thatcher, along with Ronald Reagan, deregulated the banking industries on both sides of the Atlantic, and so, we're all paying for it today with the recession).

For comparison's sake...

487220_4330111740218_417603190_n.jpg

Yes, Thatcherism, Reaganomics, laissez faire utilitarianism & deregulation. Thatcherism & Reaganomics were nothing new anyway, just a return to the free market policies of the 19th Century. It reminds me of the quote from John Stuart Mill's famous essay 'Utilitarianism' (1861):

"Utilitarianism claimed to be scientific & to have superseded moral casuistry; in fact it had only given a superficial cogency to a collection of moral-sounding slogans."

I don't know why but I have this mental image of Thatcher walking around dalek-style with a sink plunger on her head shouting "Deregulate, Deregulate!" in a metallic voice.

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MightyJordan    7,906

I don't know why but I have this mental image of Thatcher walking around dalek-style with a sink plunger on her head shouting "Deregulate, Deregulate!" in a metallic voice.

That line made me LOL. :laugh:

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Prince Charming    163

These micro countries should be given an ultimatium, hand back the money and change their ways or face military action, I'm usually against violence but it seems its the only way to stop them.

The Swiss armed forces might have something to say about that.

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thealexweb    204

The Swiss armed forces might have something to say about that.

The sum total of the Swiss Army would be nothing if the US decided it wanted its lost tax revenues back.

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Prince Charming    163

The sum total of the Swiss Army would be nothing if the US decided it wanted its lost tax revenues back.

I think you're very, very much mistaken.

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thealexweb    204

I think you're very, very much mistaken.

As far as I'm aware every male is Switzerland has to do some military service at some point so presuming all four million men in switzerland could fight, it still wouldn't be anywhere near enough to counter a US-led assualt.

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stevember    138

This is why the 'rich' media pedal anti Obama, Brown and any left wing idea.

And most people fall for it.

Health insurance investment in media companies has increased 4x since Obama announced health plans. Think people please.

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peacemf    59

Things can only get betterrrrrrrrrrr, can only get , can only get

worse

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Growled    3,880

This doesn't surprise me much. The rich have their ways of holding onto their money.

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n_K    2,537

Cameron's hell bent on selling off the nhs and police, and his friends are the rich people so he'll probably say this report is inaccurate or something and say it's wrong.

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Noir Angel    4,223

Of course they will. We couldn't expect them to give back to society could we, that would just be wrong :o In fact it wouldn't surprise me if Cameron and his bunch of jumped up toffs help them hide it.

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bj55555    229

The sum total of the Swiss Army would be nothing if the US decided it wanted its lost tax revenues back.

I shudder in the presence of the Swiss "Army". :)

swish-guards.jpg

Don't make them break out the plastic toothpick, or you'll be in big trouble.

wenger-classique-swiss-army-knife.jpg

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thealexweb    204

Cameron's hell bent on selling off the nhs and police, and his friends are the rich people so he'll probably say this report is inaccurate or something and say it's wrong.

Privatisation, if done correctly can work wonders (e,g England's privately run water companies are in a much better shape than Northern Ireland's state owned water board due to private investment), if done badly it's a mess e.g. our train system. Also health spending is essentially flat, it hasn't gone down by much if any.

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