Mitt Romney’s offshore bank accounts, tax havens and other assorted money games are playing a major role in the opinion-building phase of this year’s Presidential campaign. On cue, a new report from Tax Justice USA shows that the amount of wealth being held in such accounts has skyrocketed, creating an economic black hole.
The report estimates that at least $21 trillion (and possibly as much as $32 trillion) is currently being held by the SuperWealthy outside the jurisdiction of domestic tax authorities. The $32 trillion figure, meanwhile, represents $280 billion in squandered U.S. income tax revenue. The numbers are also damning for the financial futures of developing countries:
The report also highlights the impact on the balance sheets of 139 developing countries of money held in tax havens by private elites, putting wealth beyond the reach of local tax authorities.
The research estimates that since the 1970s, the richest citizens of these 139 countries had amassed $7.3 to $9.3 trillion of “unrecorded offshore wealth” by 2010.
The numbers have skyrocketed since Tax Justice’s last report on offshore wealth in 2005 when the SuperWealthy held $11.5 trillion. The new report places much of the blame on huge multinational banks that are helping to shift money into such accounts:
The “huge, secretive offshore industry has truly become the dark side of globalization,” the report concludes. It urges renewed efforts by developed countries to gain a handle on the problem.
According to the report, the wealth being held in these accounts is the equivalent of the United States and Japanese economies combined.