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The wealthy have stashed trillions of dollars in "pirate banks," banks which assist customers in exploiting the fragmented international regulatory system to escape oversight and, in many cases, to commit the crime of tax evasion. According to a Senate committee, at least $100B could be returned to the US Treasury each year by enforcing compliance with tax laws. Other estimates put the costs to the world tax system an order of magnitude higher.

Crucial to understanding the issue of "offshore" tax evasion is that much of the action occurs in the developed world and could be controlled by putting pressure on American and European banks such as UBS, Credit Suisse, Citigroup, Deutsche Bank, BankAmerica/Merrill Lynch, JPMorganChase, BNP Paribas, HSBC, Goldman Sachs, and Barclays.

Note: Progressive Liberal posted on this yesterday and deserves priority. So, if you feel like giving a tip, give it to PL.

Crossposted from MercRising.

Via Robert Frank, CNBC, the Tax Justice Network issues a report that alleges that trillions of dollars of the world economy is beyond the supervision of any nation and rife with tax evasion:

A significant fraction of global private financial wealth — by our estimates, at least $21 to $32 trillion as of 2010 — has been invested virtually tax-free through the world’s still expanding black hole of more than 80 “offshore” secrecy jurisdictions. We believe this range to be conservative, for reasons discussed below.
    7. The active role of private banks. Our analysis refocuses attention on the critical, often unsavory role that global private banks play. A detailed analysis of the top 50 international private banks reveals that at the end of 2010 these 50 collectively managed more than $12.1 trillion in cross-border invested assets from private clients, including via trusts and foundations.
    9. New Revenue Sources for Global Needs. Finally, if we could figure out how to tax all this offshore wealth without killing the proverbial Golden Goose, or at least entice its owners to reinvest it back home, this sector of the global underground is also easily large enough to make a significant contribution to tax justice, investment, and paying the costs of global problems like climate change.
    the term “offshore” refers not so much to the actual physical location of private assets or liabilities, but to nominal, hyper-portable, multi-jurisdictional, often quite temporary locations of networks of legal and quasi-legal entities and arrangements that manage and control private wealth — always in the interests of those who manage it, supposedly in the interests of its beneficial owners, and often in indifference or outright defiance of the interests and laws of multiple nation states.
    In short, this comparative handful of major private banking institutions now accounts for 62 to 74 percent of all offshore private wealth. Many readers will recognize the names of the dominant players, as they have done for decades: UBS, Credit Suisse, Citigroup/SSB/Morgan Stanley, Deutsche Bank, BankAmerica/Merrill Lynch, JPMorganChase, BNP Paribas, HSBC, Pictet & Cie, Goldman Sachs, ABN Amro, Barclays, Credit Agricole, Julius Baer, Societe General, and Lombard Odier.
For those interested in more in-depth reading, I recommend Laura Szarmach in Cornell Law Review. The Economist has a somewhat helpful article.

Update: Via Barry Ritholtz, a graph from Heather Stewart of The Guardian showing where the money is.

Added: All tips to Progressive Liberal who posted on this first, please.


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