The Offshore Stash
A report came out in 2012 from the Tax Justice Network, written by James Henry, a former chief economist at the global management consultancy, McKinsey. He makes what he says is a conservative estimate - and looking only at financial wealth deposited in bank and investment accounts and no other assets - that at least £13 trillion ($21 trillion) were hidden in secret tax havens (or secrecy jurisdictions as the TJN calls them) by the end of 2010, and maybe up to $32 trillion (£22 trillion-ish.) This equates to the size of the American and Japanese economies put together, this is massive, vast. World GDP in 2012 was about $85 trillion. This is a very credible organisation and author, there’s really no reason to doubt this report. There’s an invisible fund in the world the size of the USA and Japan put together! How do you hide something the size of the USA and Japan combined? It’s easy, because it’s just abstract numbers, that fit into very small spaces.
£22 trillion! Come on, £22tn! We’ve become slightly more familiar with all kinds of big numbers recently, and what the world has settled on is the US version, that a billion is one thousand million, 1,000,000,000, and a trillion is a thousand billion, 1,000,000,000,000 (a million million, the old British billion.) And the next one up when we need it will be a quadrillion.
So, let’s say, even using very roughly the 20% tax rate typically paid by wage owners in the West, just that would be £4.5 trillion that should be in public finances of the host countries. You can imagine that would make an astounding difference to things. It’s tempting to suggest that there is no financial crisis, really. There’s definitely a crisis, but it actually isn’t financial.
If everyone had paid what most of us couldn’t avoid, there isn’t any financial crisis in the world. The financial crisis actually is that a tiny percentage of the global population are making off with everybody else’s wealth. These huge amounts of capital with nowhere to go have got to be highly corrosive to everything else, and now there is many times more money in the world than there are goods to buy with it. The eventual result of what was called free trade may be a command economy, a military-security plutonomy, the logic of which governs everything else.
This is an informative piece about the machinery of it. But despite all this, the biggest tax haven of all is the land of our nations, humbled before the might of the elite power, consolidated over centuries.