How few of the 0.01% there really are
Here's an interesting story in the Guardian, ostensibly about offshore wealth, but more about wealth, and especially the wealthy.
The world's super-rich have taken advantage of lax tax rules to siphon off at least $21 trillion, and possibly as much as $32tn, from their home countries and hide it abroad – a sum larger than the entire American economy.
James Henry, a former chief economist at consultancy McKinsey and an expert on tax havens, has conducted groundbreaking new research for the Tax Justice Network campaign group – sifting through data from the Bank for International Settlements (BIS), the International Monetary Fund (IMF) and private sector analysts to construct an alarming picture that shows capital flooding out of countries across the world and disappearing into the cracks in the financial system.
$21 trillion?! Even today, that's a lot of money! And capital doesn't "disappear" into the "cracks in the financial system" (indeed, one might even think the whole purpose of the financial system is to have such cracks). The capital goes somewhere and is invested in something by someone. The article doesn't say any of that -- in fact, the tax havens obfuscate capital flows -- but it does have other interesting things to say. For one thing, the Gini co-efficient that measures inequality, bad as it seems now, isn't nearly bad enough:
Inequality is widely seen as having increased sharply in many developed countries over the past decade or more – as described in a recent paper from the IMF, which showed marked increases in the so-called Gini coefficient, which economists use to measure how evenly income is shared across societies. ...
However, Henry's research suggests that this acknowledged jump in inequality is a dramatic underestimate. Stewart Lansley, author of the recent book The Cost of Inequality, says: "There is absolutely no doubt at all that the statistics on income and wealth at the top understate the problem."
The surveys that are used to compile the Gini coefficient "simply don't touch the super-rich," he says. "You don't pick up the multimillionaires and billionaires, and even if you do, you can't pick it up properly."
In fact, some experts believe the amount of assets being held offshore is so large that accounting for it fully would radically alter the balance of financial power between countries.
So, how many people own these assets?
In total, 10 million individuals around the world hold assets offshore, according to Henry's analysis; but almost half of the minimum estimate of $21tn – $9.8tn – is owned by just 92,000 people. And that does not include the non-financial assets – art, yachts, mansions in Kensington – that many of the world's movers and shakers like to use as homes for their immense riches.
92,000 people. That's not very many. There are not very many of the Shing,...