Tag Archives | Wealth

The Rich Have Hidden $21 Trillion In Global Tax Havens

Wealth inequality between the super-rich and everyone else has been vastly underestimated, the Guardian reports:

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.

“These estimates reveal a staggering failure,” says John Christensen of the Tax Justice Network. “Inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people.

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The Walmart Heirs Now Have As Much Wealth As The Bottom 40 Percent Of Americans

Welcome to our sharecropper economy. A couple of years ago, eyebrows were raised by the news that the Walton family’s wealth was equal to that of the bottom 30 percent of U.S. families. In little time that figure has ballooned to 40 percent, the Economic Policy Institute notes:

We have argued previously that Walmart is a useful archetype for trends in the larger American economy over the past three decades. Its enormous size and bargaining power has led to fabulous wealth for its owners, while the compensation it pays its employees is generally low, even by retail standards; and the ubiquity of Walmart stores means that it is effectively the marginal employer in many U.S. counties.

In 2007, it was reported that the Walton family wealth was as large as the bottom 35 million families in the wealth distribution combined, or 30.5 percent of all American families. And in 2010, as the Walton’s wealth has risen and most other Americans’ wealth declined, it is now the case that the Walton family wealth is as large as the bottom 48.8 million families in the wealth distribution (constituting 41.5 percent of all American families) combined.

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Bank Robbery: Why Crime Doesn’t Really Pay

Writes Thomas H. Maugh II on the LA Times Science Now:
Crime doesn't pay, at least not very well, when it comes to robbing banks, a new study finds. With unprecedented access to financial data from British banks, economists have shown that bank robbers don't make a lot of money, certainly not enough to justify the risks involved in such an armed robbery. "The return on an average bank robbery is, frankly, rubbish," the researchers wrote in the statistics journal Significance. "It is not unimaginable wealth." It is so low, in fact, that it is not financially worthwhile for banks to install screens that could further reduce robberies. Economist Neil Rickman of the University of Surrey and his colleagues were given unusual access to financial data from the British Bankers' Assn. Such data about robberies are not normally disclosed to the public because it is commercially sensitive and could potentially encourage copycat robbers. Treating bank robbery as a business like any other, they used normal statistical measures to calculate profitability...
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Are The Rich Worth A Damn?

nyt mag richA vigorous case for the super rich is argued by Edward Conard of Bain Capital in an interview with Adam Davidson for the New York Times Magazine:

Ever since the financial crisis started, we’ve heard plenty from the 1 percent. We’ve heard them giving defensive testimony in Congressional hearings or issuing anodyne statements flanked by lawyers and image consultants. They typically repeat platitudes about investment, risk-taking and job creation with the veiled contempt that the nation doesn’t understand their contribution. You get the sense that they’re afraid to say what they really believe. What do the superrich say when the cameras aren’t there?

With that in mind, I recently met Edward Conard on 57th Street and Madison Avenue, just outside his office at Bain Capital, the private-equity firm he helped build into a multibillion-dollar business by buying, fixing up and selling off companies at a profit. Conard, who retired a few years ago at 51, is not merely a member of the 1 percent.

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How The Top 1% Are Reshaping America

Completed a few weeks before the Occupy Wall Street protests began, the latest episode of Al Jazeera's fantastic Fault Lines program takes a hard look at the wealthiest 1% in the United States, including talking to those in the 1% about what their wealth means:
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Occupy George: Fix Your Money

Occupy George is a (presumably illegal) attempt to convey the reality of wealth distribution in the United States to the public by adding pertinent information to paper currency and circulating it as needed. Now your money will have informational as well as purchase value. Download their templates or order the custom stamps, and you can begin minting your own Occupy George bills at home:

Money talks, but not loud enough for the 99%. By circulating dollar bills stamped with fact-based infographics, Occupy George informs the public of America’s daunting economic disparity one bill at a time.

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The Richest Politicians In Congress

Michael-Linda-McCaulRoll Call has crunched the financial data to figure out the wealthiest members of Congress and compiled a list the top 50. Ol’ mule John Kerry comes in third, followed by California representative Darrell Issa. The number one spot is held by Texas congressman Michael McCaul, who possesses about $300 million in assets, largely a result of his marriage to the daughter of Lowry Mays, the CEO and founder of the Clear Channel empire.

Looking at the entire list, the common theme, if any, is real estate investment and family money. Very few of the richest appear to have made their fortune from any activity that most people would consider a contribution to society — the most admirable is probably Issa, who founded an electronics company that manufactures car alarms. The surest conclusion to be drawn is that the estate tax will not be boosted anytime soon.

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Internet Billionaire Wants to Create ‘Libertarian’ Islands

Freedom IslandVia the NY Daily News:

Peter Thiel has made his fortune by being part of the next big thing: He was a co-founder of Paypal and one of the early investors of Facebook. But a new Details profile sums up his new plans: “Forget startup companies. The next frontier is startup countries.”

Thiel has donated $1.25 million to the Seasteading Institute, the brainchild of Patri Friedman, a former Google engineer and grandson of economist Milton Friedman. Here’s the gist: creation of libertarian, sovereign nations built on oil-rig-type platforms anchored in international waters and free from the laws and moral codes of any other country.

Plans for the prototype include a movable, diesel-powered 12,000-ton structure that could house 270 residents. The goal would be to eventually link hundreds of the structures together. Friedman’s timeline is to launch offices off San Francisco next year, get a full-time settlement within seven years and eventually diplomatic recognition from the UN.

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Should There Be A Tax On Wealth?

imagesWarren Buffett says we need a significantly higher income tax for the super-rich. But could that argument be a red herring? Partial Objects writes that the real conversation we need to be having is about taxing wealth – i.e., Buffett’s $45 billion fortune, not the paltry millions he made in 2010:

Warren Buffett wants us to stop coddling the super-rich. He argues for superlatively higher taxes on those with incomes greater than $1 million a year.

Let’s say we take Buffett’s advice, and we raise taxes so that those highest 400 income earners pay an additional 20% more in income taxes (i.e. 41.5 instead of 21.5). That would mean an additional $18 billion in revenue. Nice, right?

The US doesn’t tax wealth, but other countries do. If we did, at a modest 10%, it would mean an additional $140 billion in revenue every year. But we never talk about taxing wealth, only income.

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Who Rules America? Breaking Down the Top 1%

Here's an excerpt from an article by G. William Domhoff on Global Research. This may not exactly be news to some of us, but it certainly re-affirms a lot:
...the bottom line is this: A highly complex and largely discrete set of laws and exemptions from laws has been put in place by those in the uppermost reaches of the U.S. financial system. It allows them to protect and increase their wealth and significantly affect the U.S. political and legislative processes. They have real power and real wealth. Ordinary citizens in the bottom 99.9% are largely not aware of these systems, do not understand how they work, are unlikely to participate in them, and have little likelihood of entering the top 0.5%, much less the top 0.1%. Moreover, those at the very top have no incentive whatsoever for revealing or changing the rules. I am not optimistic.
(Full Article Here)
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