It may appear that many countries in the Eurozone are on the verge of bankruptcy. Governments in the Eurozone are implementing savage austerity cuts as they seek to reduce their deficits. These austerity measures have created widespread unemployment, poverty and economic depression. However, although millions are experiencing the impact of debt crisis, it is ‘comforting’ to know, the world has more than enough wealth to not just bailout all the Eurozone economies, but have plenty of spare change left over.
According to research commissioned by the campaign group Tax Justice Network. A global super-rich elite has exploited gaps in cross-border tax rules to hide an extraordinary £13 trillion ($21tn) of wealth offshore – as much as the American and Japanese GDPs put together –Guardian – off shore tax exiles
According to James Henry’s research, the top 10 private banks, which include UBS and Credit Suisse in Switzerland, as well as the US investment bank Goldman Sachs, managed more than £4tn in 2010, a sharp rise from £1.5tn five years earlier. It shows that the credit crunch hasn’t affected the very rich.
Almost £500bn has left Russia since the early 1990s when its economy was opened up. Saudi Arabia has seen £197bn flood out since the mid-1970s, and Nigeria £196bn. All three countries have varying degrees of poverty at home.
The IMF became interested in capital flight during mid 1980s, when it found that its figures didn’t add up. An increasing chunk of the world’s net trade and income was simply missing from its global balance of payments statistics
In 1986 a special IMF working group took a closer look at this “current account gap,” and determined that the single most important factor was missing investment income, most of it consisting of unreported interest on foreign private bank deposits.17 And fully three-quarters of the $230 billion of missing income that it found for 1977-83 belonged to the residents of developing countries, more than half of it to residents of leading debtor countries. (PDF)
a growing share of Third World wealth was being stashed in First World assets
Scale of Inequality
£6.3tn of assets is owned by only 92,000 people, or 0.001% of the world’s population – a tiny class of the mega-rich who have more in common with each other than those at the bottom of the income scale in their own societies.
What Should / Can be done about the extremes of wealth inequality?
There is certainly a degree of tax competition. France recently increased tax on wealthy people. The British chancellor responded by encouraging wealthy French to move to ‘lower tax Britain’. But, Britain could never compete with the likes of the Cayman Islands and Switzerland who do very well from ultra low tax rates.
In an ideal world, there would be a closing down of tax loopholes. Also, it would help if the rich felt a necessity of using their wealth to help the less fortunate. I have no idea how 92,000 people could possibly enjoy spending £6.3 tn of assets.