Report: $21 trillion hidden from taxman in offshore accounts
The wealthiest people in the world have exploited
loopholes in international tax rules, evading the taxman and sheltering a
staggering $21 trillion or more in offshore accounts, according to a report
released Sunday.
To give perspective to the scale of the offshore economy,
the economic transparency group Tax Justice Network said the sum is larger than
the entire United State’s economy, or enough money to entirely solve the
European debt crisis.
The report, called The Price of Offshore Revisted, says
between $21 trillion and $32 trillion could be hidden in tax havens in
countries like Switzerland and the Cayman Islands. The first details of the
report were released to the Observer in London.
And most of the money hidden overseas comes from people
who would make the was majority of the top 1 percent turn green with envy,
economists said.
Instead, some $10 trillion that has been stashed in
off-shore accounts is owned by only 92,000 people, or 0.001 percent of the
world's population, the report finds.
"These estimates reveal a staggering failure:
inequality is much, much worse than official statistics show,” said John
Christensen of the Tax Justice Network. "People on the street have no
illusions about how unfair the situation has become."
Private banks and investment firms have enabled these
wealthy individuals and corporations to take advantage of loopholes and gaps in
cross-border tax rules, according to the report.
Questions about offshore accounts and tax shelters has
recently become a major point of contention in the U.S. presidential campaign,
with Democrats accusing Republican candidate Mitt Romney of stashing some of
his wealth in offshore banks to avoid taxes.
The Romney campaign dismissed the allegations as an
"unfounded character assault."
According to the Tax Justice Network report, almost every
country has suffered from the billions of dollars in lost tax revenue, But, it
says sub-Saharan Africa and oil producing states like Saudi Arabia have been
especially hard hit. In some cases, the total worth of these hidden assets far
exceeds the international debts owed by these countries.
The report was compiled using thousands of pieces data
and sources, including information from the IMF, the Tax Justice Network said.
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