The New York Times reports there’s more money in the banks of the Cayman Islands than in all the banks of New York City combined. What’s it all doing there? Avoiding taxes for one. But perhaps even more seriously, offshore banking starves the world’s economy of cash at a time when it could really use a few extra bucks.
If you like sun and surf and hate taxes, the Cayman Islands may be for you. It’s one of the few countries in the world that has no income tax. Finding employment may be a problem — unless you’re in the banking business. In that case, you might be overworked.
According to a new report, the amount of money hiding in off-shore tax havens is staggering — between 20 and 30 Trillion dollars — or about 10 per cent of all the money in the world.
The study also found all that money is held by just 1.4 per cent of the world’s population. Since they pay no tax on it, governments all over the world — including Canada’s — lose out as much as 280-Billion dollars in lost revenues.
Chana Joffe Walt from National Public Radio’s Planet Money team spent some time digging into the world of off-shore tax havens. She found registering a company offshore required no heavy lifting, no closed door meetings, no secret handshakes — just a phone call.
Chana Joffe Walt was told that once you have the company registered, these financial institutions can open up a perfectly legal bank account for that shell company … confidential, tax-free and offshore.
James Henry believes he knows just how much money is hiding — tax-free — in off-shore accounts. He’s a former Chief Economist at the consultancy firm McKinsey and Company and the author of a new study (PDF) for the Tax Justice Network. James Henry was in Sag Harbor, New York.
Alain Deneault says Canada played a significant role in setting up offshore tax havens. And the federal government is not doing enough today to stop Canadian individuals and businesses from hiding money in these offshore accounts.
Alain Deneault is a sociologist at the UniversitĂ© du QuĂ©bec in Montreal and the author of Offshore: Tax Havens and the Rule of Global Crime.
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