Stuffing Offshore Mattresses

It’s more true than not that anyone with a lot of money wants to hide it somewhere. If nobody knows about it, they won’t have to pay taxes. Check out Phil Ebersole’s blog on this topic.

For those of us whose wealth doesn’t allow expensive cars and multiple homes, it may come as news that worldwide $21-trillion to $32-trillion is hidden by all sorts of people, from ruthless dictators to former CEOs of companies like Bain Capital. The entire US budget is a mere $3-trillion.

It may come as news that $21-trillion to
$32-trillion is hidden in offshore tax havens.

The ruthless dictators don’t really give a damn about taxes they might owe, since they stole their wealth anyway. They just want it out of the reach of everyone. For the rest, the individuals and corporations, it is usually not the goal to find an illegal tax shelter, but to find ones they can claim are legal. To do this, platoons of expensive lawyers are employed. That’s why the rest of us have no such option—we can’t afford the lawyers and fees.

The mega-rich have been very successful in this quest to avoid paying the taxes the rest of us pay more-or-less willingly. Most of them manage to pay very low rates, and some pay nothing, as do numerous corporations. All strictly legal, of course.

But here’s the rub. It’s all strictly legal because the mega-rich have used their wealth and influence over decades to build numerous exceptions and clauses into the tax laws that allow them to avoid taxes. They do this via lobbyists costing multi-millions per day, and by giving large sums of money to compliant politicians’ re-election campaigns, and a number of other ways.

Let’s try to get a grip on what a figure like $32-trillion actually means. Start with $1,000, a decent chunk of change. A thousand such chunks gives us a million, $1,000,000. Any of us can live very comfortably on this for the rest of our lives.

Once I saw an art show that included an illustration of what a million looks like. Using continuous wide-format IBM computer paper, one million dots, periods, were printed out. They covered every wall of this fairly large room.

That’s one million, 1,000,000. What does a trillion look like? A trillion dots would be a million such rooms, something like all the rooms in every home in San Francisco. Now imagine 32 San Franciscos.

How can anyone be other then enraged
at the injustice of how we’re all
being screwed over by the mega-rich?

The entire national debt comes to $16-trillion or so, well below the minimum estimated sum hiding in banks that report to no government. Sums of money of this size are very hard to get a grip on, even for those who deal in such large figures, because our own part of it is infinitesimal.

But the thing to grasp is not the quantity of these sheltered dollars, but the fact that in every case it is hidden from tax collectors. If even 1% tax were paid on it, it might come to $320,000,000,000 ($320-billion; of course, that’s worldwide, remember).

But let’s just guess that a mere $15-trillion of American money is so hidden. Suppose we were to collect a low tax of 10% on it. That would give us added revenue of $1.5-trillion ($1,500,000,000,000), or well above the entire national budget deficit of some $975-billion ($975,000,000), which includes the money we waste on wars in the Middle East and for tax breaks for people least in need of a tax break.

How can anyone be other then enraged at the injustice of how we’re all being screwed over by the mega-rich?

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