$ 21 to $32 Trillion Held in Offshore Accounts

[Quixote1818]

Last edited Tue Sep 11, 2012, 02:47 AM - Edit history (3)

Snip> This amount of money accounts for $280 billion in lost revenue from income tax each year.

Snip>Private wealth held offshore represents "a huge black hole in the world economy,"

The sum for US money is probably about 1/2 this:



This is a different link / article than I had before as it was causing virus problems. Similar article though.

http://www.huffingtonpost.com/2012/07/22/super-rich-offshore-havens_n_1692608.html

[meow2u3]

1. My antivirus blocked the page

It contains a trojan horse.

[abelenkpe]

2. A giant black hole in the worlds economy.....indeed. Nt

[HiPointDem]

3. kr

[1KansasDem]

4. Link caused my antivirus

to pop up.

[Quixote1818]

5. Since two people said this I got rid of the link. Thanks. nt

[moondust]

6. What some people won't do to avoid paying taxes.

Howard Hughes was like the Godfather of Tax Evasion.

(Cannot verify the accuracy of this blog post but I have no reason to doubt it.)

How Howard Hughes Avoided Taxes

As his empire grew, Hughes used every trick conceivable to avoid paying taxes to the government. In the early years of Hughes Aircraft, Hughes attempted to move his company from Southern California to Nevada in an effort to take advantage of Nevada's low tax rates. Ultimately, Hughes donated all his stock in Hughes Aircraft to the Howard Hughes Medical Institute, thereby turning the military contractor into a tax-exempt charity. In addition to avoiding income taxes, this had the effect of silencing the upper management in Hughes Aircraft, who for many years had clamored for stock in the company as part of their compensation.

Hughes was able to keep and maintain highly qualified managers in his companies by promising them large sums of money at the end of their careers. In order to be able to give them the most money without taxation, Hughes would make an arrangement whereby he would publicly criticize a certain manager that had recently left his company. Then, the manager would sue Hughes in court for public defamation. A settlement was given to this manager in court which was not subject to taxes. This happened with Noah Dietrich, Robert Maheu, and others. For example, Robert Maheu was awarded US$2.2 million in a defamation lawsuit shortly after leaving Hughes' employ.

Although Hughes lived in his own home in California for many years, he later came up with the idea of living in hotels as this enabled him not to have a legally declared residence in any state which would require him to pay personal income taxes. Shortly after Hughes began living in hotels with no state as his official residence, legislation was passed that any person living in a state 180 days or longer was subject to personal income tax during that time period in that state. Then, Hughes would live in a given hotel for just under 180 days, before moving to another hotel for just under 180 days, and so on. His extremely creative efforts to avoid taxes were successful; even after his death, the states of California and Texas were unable to collect inheritance taxes since it could not be proven that he was a legal resident of either state.

http://oddline.blogspot.com/2008/10/how-howard-hughes-avoided-taxes.html

[loli phabay]

8. wow dude was a genius at avoiding tax, i love the getting the guys to sue him that was clever

[hfojvt]

7. the article makes no sense and offers no proof

no sense, in that it calls that hidden wealth a "huge black hole in the world economy".

That makes some sense, if, as one commenter noted, the people hiding this wealth are 3rd world dictators. Thus, they hide their wealth outside of their countries, just in case they get overthrown, and they don't hide it in US Banks because such assets could be frozen or siezed by the US government. So perhaps they put it in a bank that pays no interest and does nothing with the money but store it, in a safe deposit box in a vault.

But it would be illogical for a US millionaire like Romney to put his money somewhere WITHOUT earning something. BUT, if his money is earning something, then it is presumably being leant out - which entails risk. If the borrower does not repay the loan, then the bank might be unable to repay the Romney. US banks are insured, and so are credit unions, generally.

Anyway, if the money is being leant out, then it is not a black hole, because the money is being used by somebody, thus stimulating some economic activity.

And for a Romney-type, it is illogical to not earn a return in order to avoid paying taxes. Duh, the tax rate is not 100% (or greater). If Romney has $100 million, he does not want it in the Cayman's earning 0% and paying no taxes. It would be better to have it in New York City, making 0.5%. Sure his $500,000 in interest income would mean he had to pay SOME taxes, but his tax bill for state and federal and city would be less than $500,000 - leaving him ahead.

Granted, Romney would be ahead by putting his money in the Cayman's or Vaduz, earn 0.5% and pay zero taxes on his interest income, but, again, if he is getting income, then somebody is using that money and it is NOT a financial black hole.

I can understand a dictator not caring about returns on investment, but even for a dictator it might make sense to put $1 million in Vaduz for safety, but then invest the rest and make some more income with it.