Is Wealth Inequality Hidden in Tax Havens? Piketty’s Co-Author Thinks So
The idea of stashing money in a Swiss bank account or some Caribbean island sounds a bit antiquated—the act of a 1960s James Bond villain. But the amount of wealth flooding into tax shelters around the world may in fact be rising to unprecedented levels.
The economist Gabriel Zucman, a protégé and co-author of the French economist Thomas Piketty, has published a new book that attempts to document money hiding out in tax havens. Mr. Zucman’s book, “The Hidden Wealth of Nations,” documents just how dramatic the recent rise has been.
To estimate the amount of hidden money, Mr. Zucman begins with a simple trick. If you add up all the financial liabilities and all the assets in the world, they ought to balance. One person’s liability ought to be another’s asset. (Or one company’s, one country’s, etc.) But if you add up all the world’s reported liabilities, the figure is about $6 trillion higher than the reported assets—a sum that’s been growing. The likeliest explanation: around $6 trillion in assets are being hidden....MUCH MORE