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Economics

Que la luz del sol entre en los paraísos fiscales

Sep 28, 2015 J. Bradford DeLong and Michael M. DeLong

BERKELEY – Los paraísos fiscales están concebidos para ser secretos y opacos. Toda la razón de su existencia es la de ocultar la riqueza escondida en ellos y un nuevo libro de Gabriel Zucman, TheHidden Wealth of Nations: The Scourge of Tax Havens (“La riqueza oculta de las naciones. El azote de los paraísos fiscales”), revela, como nunca, la magnitud de su papel en la economía mundial.

Zucman examina las discrepancias en las cuentas internacionales para ofrecer las cifras más precisas y fiables que probablemente podamos obtener sobre la cantidad de dinero almacenado en los paraísos fiscales. Calcula que el ocho por ciento de la riqueza financiera del mundo –unos 7.600 billones de dólares- está oculta en lugares como Suiza, las islas Bermudas, las islas Caimán, Singapur y Luxemburgo. Representa más riqueza que la poseída por la mitad más pobre de los 7.400 millones de personas del mundo.

Esa cifra tiene consecuencias importantes, pues representa un dinero que debería estar en la base imponible tributaria. Si los países ricos de Europa y de Norteamérica no pueden gravar eficazmente a los ricos, tienen pocas posibilidades de preservar la democracia social y contrarrestar el pronunciado aumento de la desigualdad que ha afectado recientemente a sus economías. Asimismo, las economías en ascenso abrigan pocas esperanzas de crear sistemas tributarios progresivos, si no pueden encontrar la riqueza de sus plutócratas.

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J. Bradford DeLong

Writing for PS since 2002
248 Commentaries

J. Bradford DeLong, Professor of Economics at the University of California, Berkeley, is a research associate at the National Bureau of Economic Research and the author of Slouching Towards Utopia: An Economic History of the Twentieth Century (Basic Books, 2022). He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.

Michael M. DeLong

Writing for PS since 2015
2 Commentaries

Michael M. DeLong is Director of the Coalition to Protect Patient Choice.

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0 Comments on this paragraph, 12 Comments on this article

D. V. Gendre Apr 11, 2016

I'm shocked how media and politics span together and endorse wolrd finance and tax tyranny. Governments and media try to legalize modern slavery on a global scale. All despots on this planet must already rub their hands because they can't wait to know where their servants and political opponents have their money to repress them even more. And unfortunately we have even in Western society a tendency towards despotism.
Take the $7.6 trillion and assume that on this money tax would have been paid. What would have changed in our world? Nothing except that global debt would now be at $70 trillion instead of $60 trillion! For each dollar paid more in taxes governments would have spent an extra dollar more! This will all end badly because we are talking here about money.
Furthermore I can't understand how a rather intelligent man (society) can put the financial responsebility of his earnings in the hand of bankrupts (governments). No one clear in mind would delegate wealth management to a bankrupt bank but the society as a whole passes the responsibility of the entire income and wealth to the most lousy money managers that have added 19 trillion in debt alone in the US! But maybe our "bright" mass media twittering society deservse nothing better.
Then it is interessting what naive solutions are suggested to that problem. The only thing that would not only increase tax honesty but most likely also tax collection would be to simplify tax rules and reduce massively loop holes! But certainly not to make things even more complicated. My entire live I hear that politics want to simplify taxes but they haven't managed this task in barely one Western country. But now the solution proposed is world tax tyranny! But don't worry the multinational companies with their army of lawyers will also find easily loop holes in such world with even more complex tax codes.
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LAXMIDHAR N BHOLA Apr 10, 2016

If Tax Havens are well understood by many,if 'IT has a basic tendency to remain as fluid as ever,THEN, where is the chance to 'conceal? When there are "disruptive Technologies" that have already made WIKILEAKS a GLOBAL PHENOMENA,there is no room for a 'Peon or a Bureaucrat or a Minister to conceal FOREVER'-that era is 'nowhere SAFE during this UNPREDICTABLE CENTURY'.One can tag this century as A CENTURY OF ALL POSSIBILITIES AND A CENTURY OF ALL UNPREDICTABILITIES AS WELL.No one can guarantee 'the act of concealing to remain SAFE for ever! Better some should 'look for opportunities' to invest wisely and Wealth Management companies have a role to play 'to convince' and get them stsyPut legitimately.
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Richard Todd Sorenson Nov 3, 2015

I'd venture a guess the figure in tax havens is much higher than he estimates. Consider the value of the derivatives market. At the height of the collapse it was many, many more times than global GDP. I would imagine they've figured out ways to play with those darn weapons of financial destruction as Warren Buffett describes them to extract more from the global economy than anyone realizes. The casino is rigged. Matthew 21:12-13.
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Richard Stewart Oct 9, 2015

There seems to be an assumption here that taxes are always good and avoiding them is always bad?

Curious.
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Victor Douglas Oct 4, 2015

The main use of a "tax haven" like the Cayman Islands, as far as I know, is to pool tax-exempt US investor money (state pension funds, etc) with foreign money into foreign feeder funds into US-managed hedge funds. None of these investors would pay US income tax anyway, if invested directly in the US markets, except on dividend income, which already is withheld at the maximum 30% rate (which is higher than the tax treaties with most EU countries or Japan would provide for). Accordingly, most of this money sees no benefit at all on final tax payments. The only benefit is simpler accounting.

Accordingly, you should be VERY careful about assuming one could raise a lot more money by eliminating "tax havens". The possible tax take may be overstated by a factor of 2, 3, or more.
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Jack Davis Sep 30, 2015

I wonder if a better solution might be to tax shareholders directly. Josh Barro made a good argument for this in The New York Times earlier this year. I seems simpler to tax appreciated capital gains/dividends than to allocate what % of multinational corporate profits belong to which country's tax base.
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Paul Daley Sep 30, 2015

Good article. Financial registries identifying the beneficial owners of all assets are long overdue. Without them, it's simply impossible to enforce either private judgments or public laws. How best to apportion profits for taxation, and the use of tax incentives for investments are matters for negotiation and should probably be taken up as a part of the current trade negotiations between the US and the EU, and the US and its Pacific partners.
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Avraam Dectis Sep 29, 2015

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Good column, good suggestions, as long as widely held basic assumptions on governmental funding systems are not challenged.

The assumption I would like to challenge is the assumption that income taxes are a necessary component of progressive low inequality advanced societies.

To challenge that assumption, step back and ask what is the ultimate goal? We do not tax for moral reasons, but to fund.

We could fund by merely borrowing the money by floating bonds and, when due, paying them with QE type operations.

We know that money bound up in financial assets does not stoke inflation since it is not spent. Therefore, if X dollars are squirelled away by the wealthy, then X dollars only need to be raised through the above Bond Funded Government mechanism.

Imagine the changes of a Bond Funded Government, where the majority of funds were raised through bonds and inflation controlled through judicious use of asset taxes such as a national real estate tax; lending restraints such as loan to value constraints, reserve requirements, interest rates and the like.

Tax havens would mostly be out of business. The appalling hassle of income taxes would be history. The economy would be far more robust because its new design would keep it near full employment.

The demand reducing mechanisms defined above would vary directly with the inflation rate. Secular stagnation and Zero Lower Bound would be unlikely under Bond Funded Government.

If we can defeat our inhibitions about funding through bonds and not taxing the rich, we can have a far better society.

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Casual Observer Sep 29, 2015

Australians get annoyed that the mining companies pay zero profit taxes there, because they book sales through Singaporean "marketing" arms. As far as I can tell this rule would have no effect on that.
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Bobby Goren Sep 29, 2015

There's a real opportunity for a "three-fer" if rules can be developed that make avoiding detection more difficult for tax cheats, drug dealers and terrorists combined. And those who want to limit tax cheats should not be above hitting home the point that if you're for the tax cheats, you're aiding terrorists and drug dealers. It's a bit of demagoguery that just happens to be true.

The other shell game that should be stopped is how some states game the tax system, which you allude to in your column. I extend this to tax incentives. Why is it that so many red states are allowed to use the surplus funds they get from the feds (defense spending, social programs, education, etc) to subsidize low state tax rates, particularly for the rich, and tax giveaways for companies rather than higher service levels for those in need?
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David Kinder Sep 29, 2015

My math calculates that at the highest tax rates only about $2.5 to $3 trillion could be collected or about $1,000 per recipient. How long could that last and then it is gone?
All the world's governments debts equal over $200 trillion. It would seem that GOVERNMENT is more of threat to the bottom 50% inhabitants than a few tax cheats.
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Michael Public Sep 28, 2015

My back of a napkin maths shows that 7.6 trillion is enough to replace the entire world's electricity production with solar panels at current prices.
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