A 2007 leak of detailed records of 30,000 clients of HSBC Private Bank, a Swiss subsidiary of a British banking giant, is giving researchers a fresh view into the shadowy offshore banking world that had once been a relative unknown. US and Scandinavian researchers studying this data estimate that the top 0.01% of the wealth distribution own about half of all offshore assets. This represents roughly one-quarter of their total wealth. These wealthy few have relocated these funds in order to avoid paying taxes in their home countries. In Scandinavia, individuals with over $40 million in net wealth, the top 0.01%, avoid about 30% of their personal tax burden. This figure may be even higher in nations with poorly enforced laws. These findings clearly imply that governments are losing tax revenue that is being hidden by the ultra-wealthy. In order to recover these funds, governments worldwide would have to strengthen tax laws and start cracking down on tax evasion services provided by institutions firmly rooted in other sovereign territories. But, until the lucrative nature of these services is overshadowed by the penalties accrued, tax evasion is certain to continue.
See Ana Swanson, The Ultra-Rich Are Hiding Way More Money Overseas than Anyone Realized, The Washington Post, June 1, 2017.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.
