FacebookTwitterGoogle+RedditEmail

The Tax Havens of the Super-Rich

by SAM PIZZIGATI

Are America’s rich getting richer? Certainly. Every official yardstick shows that America’s most affluent are upping their incomes much faster than everyone else.

How fast? Between 1980 and 2010, note economists Emmanuel Saez and Thomas Piketty, incomes for America’s top 1 percent more than doubled after inflation. They now average a little more than $1 million.

The top 0.1 percent saw their incomes more than triple, to $4.9 million, over that same span. And income more than quadrupled for the top 0.01 percent — the richest 16,000 Americans — to nearly $24 million.

And what about the rest of us? After inflation, average incomes for America’s bottom 90 percent actually fell — by 4.8 percent — between 1980 and 2010, from $31,337 to $29,840.

These numbers tell us how much people make. Measuring wealth gauges how much people have. The two, common sense tells us, ought to be related. If incomes are getting much more unequal, then the distribution of our national wealth ought to become much more unequal too.

But that doesn’t seem to be the case. A Congressional Research Service of new Federal Reserve data indicates that the gap between the wealth of America’s most awesomely affluent and everyone else is holding steady.

In 2010, the Fed data show, the top 1 percent held 34.5 percent of the nation’s wealth, almost the same exact share as in 1995, and not that much more than the 30.1 percent share they held in 1989.

These numbers just don’t add up — income is increasingly skewed toward the top, but wealth distribution is holding steady. What can explain this paradox?

Maybe the Federal Reserve isn’t doing a good job of assessing just how much wealth the wealthiest Americans own. Indeed, Fed researchers do acknowledge that they don’t take into account — for privacy reasons — the wealth of anyone listed in the Forbes magazine annual list of America’s 400 richest.

But including these 400 only moves the top 1 percent’s share of America’s wealth up by a bit over a percentage point. It isn’t enough to explain the disconnect between the extraordinary income gains of America’s rich and the modest rise in their share of national wealth.

Maybe the rich are simply living large, wasting their astronomical incomes on caviar, private jets, and other luxuries. But wasteful consumption can’t explain the inequality paradox either. Deep pockets in America’s top 0.01 percent could shell out $5,000 every single day of the year and still have 93 percent of their annual incomes left to spend.

So what in the end can explain the inequality paradox? The London-based Tax Justice Network has an answer. The world’s super rich, the group has just reported, are squirreling away — and concealing — phenomenal quantities of their cash in secret global tax havens.

The Network’s new tax-dodging study “conservatively” computes the total wealth stashed in these havens at $21 trillion. That total could plausibly run as high as $32 trillion.

Americans make up, we know from previous research, almost a third of the global super rich. That would put the American share of unrecorded offshore assets as high as $10 trillion.

Add this $10 trillion to the wealth of America’s top 1 percent and the inequality disconnect between wealth and income largely disappears. Paradox solved.

Now we have to tackle a much bigger challenge: ending the march to ever greater inequality. Shutting down tax havens would make a great place to start.

Sam Pizzigati is an associate fellow at the Institute for Policy Studies in Washington DC, editor of the journal Too Much and author of The Rich Don’t Always Win, Seven Stories Press, New York, forthcoming 2012.

This column is distributed by OtherWords.

Sam Pizzigati writes on inequality for the Institute for Policy Studies. His latest book is The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970 (Seven Stories Press). 

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

February 20, 2017
Bruce E. Levine
Humiliation Porn: Trump’s Gift to His Faithful…and Now the Blowback
Melvin Goodman
“Wag the Dog,” Revisited
Robert Hunziker
Fukushima: a Lurking Global Catastrophe?
David Smith-Ferri
Resistance and Resolve in Russia: Memorial HRC
Kenneth Surin
Global India?
Norman Pollack
Fascistization Crashing Down: Driving the Cleaver into Social Welfare
Patrick Cockburn
Trump v. the Media: a Fight to the Death
Susan Babbitt
Shooting Arrows at Heaven: Why is There Debate About Battle Imagery in Health?
Matt Peppe
New York Times Openly Promotes Formal Apartheid Regime By Israel
David Swanson
Understanding Robert E. Lee Supporters
Michael Brenner
The Narcissism of Donald Trump
Martin Billheimer
Capital of Pain
Thomas Knapp
Florida’s Shenanigans Make a Great Case for (Re-)Separation of Ballot and State
Jordan Flaherty
Best Films of 2016: Black Excellence Versus White Mediocrity
Weekend Edition
February 17, 2017
Friday - Sunday
David Price
Rogue Elephant Rising: The CIA as Kingslayer
Matthew Stevenson
Is Trump the Worst President Ever?
Jeffrey St. Clair
Roaming Charges: Tinker, Tailor, Soldier, Flynn?
John Wight
Brexit and Trump: Why Right is Not the New Left
Diana Johnstone
France: Another Ghastly Presidential Election Campaign; the Deep State Rises to the Surface
Neve Gordon
Trump’s One-State Option
Roger Harris
Emperor Trump Has No Clothes: Time to Organize!
Joan Roelofs
What Else is Wrong with Globalization
Andrew Levine
Why Trump’s Muslim Travel Ban?
Mike Whitney
Blood in the Water: the Trump Revolution Ends in a Whimper
Vijay Prashad
Trump, Turmoil and Resistance
Ron Jacobs
U.S. Imperial War Personified
David Swanson
Can the Climate Survive Adherence to War and Partisanship?
Andre Vltchek
Governor of Jakarta: Get Re-elected or Die!
Patrick Cockburn
The Coming Destruction of Mosul
Norman Pollack
Self-Devouring Reaction: Governmental Impasse
Steve Horn
What Do a Louisiana Pipeline Explosion and Dakota Access Pipeline Have in Common? Phillips 66
Brian Saady
Why Corporations are Too Big to Jail in the Drug War
Graham Peebles
Ethiopia: Peaceful Protest to Armed Uprising
Luke Meyer
The Case of Tony: Inside a Lifer Hearing
Binoy Kampmark
Adolf, The Donald and History
Robert Koehler
The Great American Awakening
Murray Dobbin
Canadians at Odds With Their Government on Israel
Fariborz Saremi
A Whole New World?
Joyce Nelson
Japan’s Abe, Trump & Illegal Leaks
Christopher Brauchli
Trump 1, Tillerson 0
Yves Engler
Is This Hate Speech?
Dan Bacher
Trump Administration Exempts Three CA Oil Fields From Water Protection Rule at Jerry Brown’s Request
Richard Klin
Solid Gold
Melissa Garriga
Anti-Abortion and Anti-Fascist Movements: More in Common Than Meets the Eye
Thomas Knapp
The Absurd Consequences of a “Right to Privacy”
FacebookTwitterGoogle+RedditEmail