getting back the $7 Trillion in offshore Tax Havens

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.

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 concentration

Progressive income and wealth tax reduce income and savings incentives at the top

Estate taxation can prevent self-made wealth from becoming inherited wealth

Bottom 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?]

http://gabriel-zucman.eu/files/SaezZucman2014Slides.pdfeml.berkeley.edu/...