While there is abundant anecdotal evidence on offshore foreign wealth holdings of high net worth individuals from the developing world, the quantification of these holdings is difficult.
Recent studies have tried to fill this gap. Zucman (2011)1 finds that in 2008 $4.49 trillion in securities assets were held offshore, while he estimates total offshore assets at 8% of total personal household wealth.
A study by Tax Justice Network2 has estimated total wealth held offshore at between $21 and $32 trillion in 2010, or between 9% and 13% of their estimate of total global household wealth, of which $7.3 trillion to $9.3 trillion from developing countries. More recently, Andersen, Johanessen, Laseen and Paltseva (2012)3 have presented preliminary results suggesting that about 8% of all petroleum rents end up in offshore accounts in countries with weak institutions. While uncertainty remains owing to the need for assumptions to derive these figures, there is growing agreement about the rough scope of the problem, as well as the jurisdictions that are home to much of this wealth.
Significant policy steps have been taken to curb tax evasion of this kind in recent years, most notably through the EU Savings Directive and the expanded uses of Tax Information Exchange Agreements. However, recent research suggests that both measures have for the most part led to the reallocation of personal wealth to new tax havens rather than any significant decreases in aggregate wealth held in offshore centers.4 This suggests the need for more or alternative measures to address this challenge.
- Zucman, G. (2012), The Missing Wealth of Nations: Are Europe and the US Net Debtors or Net Creditors?, mimeo, Paris School of Economics.
- TJN (2012), The Price of Offshore, Tax Justice Network Briefing Paper.
- Andersen, J., N. Johannesen, D. Lassen and E. Paltseva (2012), Petro Rents and Hidden Wealth: Evidence from Bank Deposits in Tax Havens, mimeo.
- See Johannesen, N. and G. Zucman (2012), The End of Bank Secrecy? An Evaluation of the G20 Tax Haven Crackdown, mimeo and Zucman, G. (2012), The Missing Wealth of Nations: Are Europe and the US Net Debtors or Net Creditors?, mimeo, Paris School of Economics.