Via the Guardian, we get this very interesting graphic about capital flight to off shore tax havens.

 

click for ginormous graphic
http://image.guardian.co.uk/sys-images/Observer/Pix/pictures/2012/07/21/gu_wealth-offshore-01.jpg

 

Its based on this report:  The_Price_of_Offshore_Revisited_PDF

Category: Taxes and Policy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

16 Responses to “$21 Trillion Dollars in Capital Flight to Tax Havens”

  1. formerlawyer says:

    Where is North America in this montage?

    ~~~

    BR: Not an off shore haven . . .

  2. Moss says:

    No doubt Willard is among the patriots.

  3. Petey Wheatstraw says:

    No wonder the global economy is locking up.

  4. Frwip says:

    @formerlawyer

    It’s only about developing / intermediate countries. Presumably, developed countries are the ultimate recipient, thanks to their deeper and (presumably) ‘more reliable financial markets and the availability of instruments that allows for the delocalization of their ownership in off-shore heavens.

    @BR

    The linky to the Guardian is broken. The URL to this post is somehow tacked on it.

    http://www.guardian.co.uk/business/2012/jul/21/offshore-wealth-global-economy-tax-havens?CMP=twt_fd

  5. willid3 says:

    its actually that even the US has a lot wealth that leaves. and does nothing for us
    its not about the reliability of the market, its the tax havens reduction of taxes. by hiding it wealth.
    though I seem to recall that there are a few developed countries that end up importing wealth too (like Switzerland)

  6. rtalcott says:

    OK…suppose that governments do get a piece of this (*remains to be seen if they do)…but then what…more military spending…more wars…more crony capitalism…..tell me what changes…
    rt

  7. formerlawyer says:

    Barry I understand but my question is more where do Americans and Canadians (yes I know Mexico is in North America) stash their money? Or is it a net inflow? For example the recent Facebook billionaire (I forget his name) that kept his capital gains/money offshore?

  8. formerlawyer says:

    Oops – this is the developing world, my bad. But I still wonder what the cash flows from developed countries to tax havens are.

  9. pacified says:

    As we all know, there is nothing more patriotic than hiding money in offshore bank accounts to skirt responsibilities as a citizen.

  10. b_thunder says:

    When Capgemini reports that total wealth of HNWI worldwide is $42T, does that include offshore assets this report is talking about?
    Or does this mean that the total wealth of HNWI is 50 to 75% greater than we all have thought? And this doesn’t include real estate and certain other assets.
    And if it’s so, there’s a significant chance that 99% will grow into 99.8%, which will transforms idealistic movement of college kids into a revolutionary movement. Revolutionary as in France, Russia, or USA

  11. VennData says:

    rtalcott,
    Well, Clinton balanced the budget with slightly higher taxes. And most importantly for you, since that’s definately from the ‘me’ party talking point list, then YOUR taxes would go down.

  12. patfla says:

    The graphic is good but confusing. The I read the Guardian article – it seemed to be referring to all countries (both developing and developed). Then I eyeballed all the circles on the developing (-only) graphic. I don’t think those add up to $21 trln.

    They all add up $7.459 trln (at a first pass). So if the worldwide total (the Guardian article says ‘world’ several places, and ‘developing’ doesn’t appear) is 21, the the total figure for the developed counties would be $13.541.

  13. OH says:

    The data are wrong, and the concepts make no sense. Capital flight from Saudi Arabia and Kuwait to “Tax Havens”? In case the author did not notice, there are no taxes in Saudi or Kuwait, so why would there be “capital flight” to a low tax jurisdiction?

    But more generally, is the chart basically saying that every country that has ever had a current account surplus is a source of “capital flight”? Does that make sense?

    Could it simply not be that, as incomes growth, assets move from less sophisticated to more sophisticated financial systems? Swiss banks maybe expensive, but I bet you they offer a better service than Kazakh or Russian banks.

  14. JimRino says:

    OH, to take the money out of the country in case of a revolution or a “revolution”, or an external attack.
    Probably in Swiss bank accounts.

  15. victor says:

    The graph is only for Developing countries. Most (if not all) capital there has been obtained illegally by western standards (think Mubarak’s billions) and quietly squirrelled away into tax heavens abroad then re-deployed into “mature” markets such as NYSE. Those on this blog searching for capital flight from US are searching in vain, there is little due to the long arm of the IRS. Capital repatriation is a different story, though it applies mainly to US corporations doing business abroad, think AAPL, GE, etc.