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Global Super-Rich Stashing Up To $32 Trillion Offshore, Masking True Scale Of Inequality: Study


President of the football club AS Monaco, Dmitry Rybolovlev of Russia, attends the French League two soccer match Monaco vs Bastia, Monday, Feb. 13, 2012 in Monaco stadium.
(AP Photo/Lionel Cironneau)

By Jillian Berman
Posted: 04/29/2013 2:17 pm EDT

The global super-rich are stashing trillions of dollars offshore with the help of some of the world's biggest banks, putting billions of dollars out of the taxman’s reach and masking wealth inequality's true heights.

Wealthy people were hiding between $21 and $32 trillion in offshore jurisdictions around the world [ http://www.taxjustice.net/cms/upload/pdf/Price_of_Offshore_Revisited_120722.pdf ] as of 2012, according to a 2012 study from the Tax Justice Network, an organization which aims to promote tax transparency. The study, highlighted by a recent Bloomberg News report [ http://www.bloomberg.com/news/2013-04-29/billionaires-flee-havens-as-trillions-pursued-offshore.html ], found that more than $12 trillion of that money was managed by 50 international banks, many of which received bailouts during the financial crisis, according to James Henry, the study’s author.

“There’s a lot more missing wealth in the world than we had known about from previous estimates,” Henry told The Huffington Post. “The real scandal is not all these individual scandals but the fact that world’s policy makers who know about this stuff, have basically done nothing.”

The issue of wealthy individuals hiding their money offshore has come into sharp focus in recent months as reports, including those of the International Consortium of Investigative Journalists [ http://www.huffingtonpost.com/2013/04/03/offshore-companies-politicians_n_3008426.html ], have noted the broad scope of the issue.

The study's findings also reveal that the true levels of global income inequality remain unknown, as current estimates do not incorporate the offshore stashes and hence underestimate its true levels. the study found.

The G20 only recently made a push [ http://www.guardian.co.uk/politics/2013/apr/20/george-osborne-g20-fight-tax-evasion ] for its member countries to automatically exchange financial information about possible tax evaders. Under such an agreement, the U.S. would alert Mexican officials if it suspected a wealthy Mexican resident of stashing cash in an American bank account.

According to Henry, it’s not increasing tax rates that are driving the wealthy to move their cash offshore; it’s simply the growth in the offshore money industry.

“This offshore wealth industry has been exploding even in a period in which we have been cutting taxes,” he said. “It’s been growing at something like 15 to 16 percent a year in nominal terms.”

Many of the nations around the world being subjected to austerity in the face of major debt problems could use some of the tax revenue from all that money stashed offshore to address their woes. Overall, the world’s tax authorities are losing $200 to $300 billion in taxes because of offshore wealth issues, the study found.

Copyright © 2013 TheHuffingtonPost.com, Inc.

http://www.huffingtonpost.com/2013/04/29/wealthy-stashing-offshore_n_3179139.html [with comments]


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Safeguard Properties Internal Documents Reveal Rampant Complaints Of Thefts, Break-Ins

Kara Lingenfelter claims that a contractor working for Safeguard Properties broke into her North Haven, Conn., home in March and removed pellet guns, jewelry and her son's coin bank. Someone even took his Boy Scout badges and medals, she said.
04/29/2013
http://www.huffingtonpost.com/2013/04/29/safeguard-properties-complaints_n_3165191.html [with embedded video report, and comments]


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Rep. Billy Long (R-Mo.): My Constituents Want More Sequestration, Not Less

05/01/2013
http://www.huffingtonpost.com/2013/05/01/billy-long-sequestration_n_3194099.html [with embedded video report, and comments]


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The Fed, Apple and Trickle-Down Economics

By Robert Reich
Posted: 05/01/2013 1:32 pm

The Fed's policy of keeping interest rates near zero is another form of trickle-down economics.

For evidence, look no further than Apple's decision to borrow a whopping $17 billion and turn it over to its investors in the form of dividends and stock buy-backs.

Apple is already sitting on $145 billion. But with interest rates so low, it's cheaper to borrow. This also lets Apple avoid U.S. taxes on its cash horde socked away overseas where taxes are lower.

Other big companies are doing much the same on a smaller scale.

Who gains from all this? The richest 10 percent of Americans who own 90 percent of all shares of stock.

But little or nothing is trickling down. The average American can't borrow at nearly the low rates Apple or any other big company can. Most Americans no longer have a credit rating that allows them to borrow much of anything.

It would be one thing if Apple and other giant companies were borrowing in order to expand operations and create new jobs. But that's not what's going on. Apple, remember, is still sitting on $145 billion.

The reason big companies aren't creating more jobs is consumers aren't buying enough to justify the expansion. And government is cutting back on spending.

Big corporations are borrowing simply in order to push stock prices up and reward their investors.

It's a sump pump with the Fed on one end buying up bonds to keep interest rates low, and shareholders on the other end raking in the returns.

Get it? Easy money from the Fed can't get the economy out of first gear when the rest of government is in reverse.

Trickle-down economics is the first cousin of austerity economics. Austerity is nuts when so many millions are out of work. And as we've learned before, trickle-down is a fraud. Nothing ever trickles down.

Copyright © 2013 TheHuffingtonPost.com, Inc.

http://www.huffingtonpost.com/robert-reich/the-fed-apple-and-trickle_1_b_3194242.html [with comments]