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Who Owns the Wealth in Tax Havens? Macro Evidence and Implications for Global Inequality

Author

Listed:
  • Annette Alstadsæter
  • Niels Johannesen
  • Gabriel Zucman

Abstract

Drawing on newly published macroeconomic statistics, this paper estimates the amount of household wealth owned by each country in offshore tax havens. The equivalent of 10% of world GDP is held in tax havens globally, but this average masks a great deal of heterogeneity—from a few percent of GDP in Scandinavia, to about 15% in Continental Europe, and 60% in Gulf countries and some Latin American economies. We use these estimates to construct revised series of top wealth shares in ten countries, which account for close to half of world GDP. Because offshore wealth is very concentrated at the top, accounting for it increases the top 0.01% wealth share substantially in Europe, even in countries that do not use tax havens extensively. It has considerable effects in Russia, where the vast majority of wealth at the top is held offshore. These results highlight the importance of looking beyond tax and survey data to study wealth accumulation among the very rich in a globalized world.

Suggested Citation

  • Annette Alstadsæter & Niels Johannesen & Gabriel Zucman, 2017. "Who Owns the Wealth in Tax Havens? Macro Evidence and Implications for Global Inequality," NBER Working Papers 23805, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:23805 Note: IFM PE POL DAE
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    References listed on IDEAS

    as
    1. Roine, Jesper & Waldenström, Daniel, 2014. "Long run trends in the distribution of income and wealth," Working Paper Series, Center for Fiscal Studies 2014:5, Uppsala University, Department of Economics.
    2. Thomas Piketty & Emmanuel Saez & Gabriel Zucman, 2016. "Distributional National Accounts: Methods and Estimates for the United States," NBER Working Papers 22945, National Bureau of Economic Research, Inc.
    3. Simon Kuznets & Elizabeth Jenks, 1953. "Shares of Upper Income Groups in Income and Savings," NBER Books, National Bureau of Economic Research, Inc, number kuzn53-1, January.
    4. Niels Johannesen & Gabriel Zucman, 2014. "The End of Bank Secrecy? An Evaluation of the G20 Tax Haven Crackdown," American Economic Journal: Economic Policy, American Economic Association, vol. 6(1), pages 65-91, February.
    5. Bertrand Garbinti & Jonathan Goupille-Lebret & Thomas Piketty, 2017. "Accounting for Wealth Inequality Dynamics: Methods, Estimates and Simulations for France (1800-2014)," Working Papers 201605, World Inequality Lab.
    6. Thomas Piketty & Emmanuel Saez, 2003. "Income Inequality in the United States, 1913–1998," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 1-41.
    7. Johannesen, Niels, 2014. "Tax evasion and Swiss bank deposits," Journal of Public Economics, Elsevier, vol. 111(C), pages 46-62.
    8. Simon Kuznets & Elizabeth Jenks, 1953. "Shares of Upper Income Groups in Savings," NBER Chapters,in: Shares of Upper Income Groups in Income and Savings, pages 171-218 National Bureau of Economic Research, Inc.
    9. Christoph Lakner & Branko Milanovic, 2016. "Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession," World Bank Economic Review, World Bank Group, vol. 30(2), pages 203-232.
    10. Gabriel Zucman, 2013. "The Missing Wealth of Nations: Are Europe and the U.S. net Debtors or net Creditors?," The Quarterly Journal of Economics, Oxford University Press, vol. 128(3), pages 1321-1364.
    11. Novokmet, Filip & Piketty, Thomas & Zucman, Gabriel, 2017. "From Soviets to Oligarchs: Inequality and Property in Russia 1905-2016," CEPR Discussion Papers 12411, C.E.P.R. Discussion Papers.
    12. Jørgen Juel Andersen & Niels Johannesen & David Dreyer Lassen & Elena Paltseva, 2013. "Petro Rents, Political Institutions, and Hidden Wealth: Evidence from Bank Deposits in Tax Havens," EPRU Working Paper Series 2013-03, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
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    14. Thomas Piketty & Gabriel Zucman, 2014. "Capital is Back: Wealth-Income Ratios in Rich Countries 1700–2010," The Quarterly Journal of Economics, Oxford University Press, vol. 129(3), pages 1255-1310.
    15. Boyce, James K., 1992. "The revolving door? External debt and capital flight: A Philippine case study," World Development, Elsevier, vol. 20(3), pages 335-349, March.
    16. Emmanuel Saez & Gabriel Zucman, 2016. "Editor's Choice Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data," The Quarterly Journal of Economics, Oxford University Press, vol. 131(2), pages 519-578.
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Bitcoin and Fundamentals
      by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets on 2017-12-04 18:12:34

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    Cited by:

    1. Niels Johannesen & Tim Stolper, 2017. "The Deterrence Effect of Whistleblowing: An Event Study of Leaked Customer Information from Banks in Tax Havens," CESifo Working Paper Series 6784, CESifo Group Munich.

    More about this item

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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