By ann summers
If you’re rich and you don’t want to pay taxes, here’s a way to go. Drop that billion in a secret bank account abroad. It’s illegal, but there are plenty of people who will help you do it. And there are a lot of people who do it.
Just when reading Thomas Piketty’s book was important, another book this time by one of his collaborators (those damn Freedom Fries economists) emerges to make the issues of ill-gotten off-shore wealth important for the coming election…and yes, questions from this book should be asked during the candidate debates and in those town halls.
Then again these tax evaders did steal it fair and square, and providing the institutional support for all kinds of illegal and immoral activity is modern capitalism at its best – isn’t that the risk/reward game that everyone is supposed to play and too bad if you’re too poor to buy some bootstraps.
In The Hidden Wealth of Nations, Zucman offers an inventive and sophisticated approach to quantifying how big the problem is, how tax havens work and are organized, and how we can begin to approach a solution. His research reveals that tax havens are a quickly growing danger to the world economy. In the past five years, the amount of wealth in tax havens has increased over 25%—there has never been as much money held offshore as there is today. This hidden wealth accounts for at least $7.6 trillion, equivalent to 8% of the global financial assets of households. Fighting the notion that any attempts to vanquish tax havens are futile, since some countries will always offer more advantageous tax rates than others, as well the counter-argument that since the financial crisis tax havens have disappeared, Zucman shows how both sides are actually very wrong. In The Hidden Wealth of Nations he offers an ambitious agenda for reform, focused on ways in which countries can change the incentives of tax havens. Only by first understanding the enormity of the secret wealth can we begin to estimate the kind of actions that would force tax havens to give up their practices.
Policies to Reduce Wealth Inequality
Top 1%: Progressive taxation (income, wealth, inheritance) is a
proven historical tool to reduce income/wealth concentrationProgressive income and wealth tax reduce income and savings
incentives at the topEstate taxation can prevent self-made wealth from becoming
inherited wealthBottom 90%: Collapse in savings due to surge in debt [due to
present bias for consumption? stagnating incomes? financial
de-regulation?]⇒ Middle class income support + financial regulation
⇒ Need to encourage savings / discourage debt [= nudged savings +
borrow against yourself?]
Click to access SaezZucman2014Slides.pdf
Click to access saez-zucmanNBER14wealth.pdf
Nicole Plyler Fisk
Gene Howington
FFS Guest Blogger
Joy of Fishes
Chuck Stanley
shortfinals
Terry Welshans
ann li-summers
wordcloud9
Flowers For Socrates 
The current tax code is the reason for the existence of offshore tax havens. Mitt Romney may have money in the Cayman Islands, however if he already paid taxes on the money before he put it there, why do some people gripe about that?
Jeff,
The problem, is due to the fact that cash is stashed offshore BEFORE it is brought into the US, even though it is owned by US citizen. It is kept offshore so taxable money never crosses US shores, and therefore is not taxable. No taxes are paid. That is why places like the Cayman Islands are called “tax havens.”
I recall back in the 1950s, when we had a viable middle class and job stability, the top tax bracket was 90%. The wealthy could still be wealthy, but there was a price to be paid for amassing obscene amounts of money and assets. Manufacturing jobs still existed in places like Detroit, Pittsburgh, and thousands of other towns and cities like them. Between the Vietnam War and election of Richard Nixon, the whole fabric of our society and economic systems started to erode. The decay of our economic system accelerated with exponential speed when Reagan was elected.
Chuck Stanley, the tax code is part of the problem. As soon as the money is brought back in from offshore tax havens, it is taxed like it was before the money was moved to a tax haven. The collapse of 2008 should not be blamed solely on George W. Bush. What lead to the collapse was the 9/11/2001 World Trade Center attack. Try reading the Fair Tax act as well as the books. Read Steve Forbes book Flat Tax Revolution. Either the Fair Tax or the flat tax would be better than what we currently have.
Chuck Stanley, a even though the marginal tax rate is high (I know what a marginal tax rate is,) people pay a lower effective rate due to the various deductions and credits that are available. A flat tax or a national sales tax would make more sense.