$21tn free for the taking!

At least, according to the Tax Justice Network and the BBC:

A global super-rich elite had at least $21 trillion (£13tn) hidden in secret tax havens by the end of 2010, according to a major study.

View 6-page report summary directly here.

At least $21,000 billion. Wow. This implies the wealth of 21,000 billionaires from 139 countries. This gives an average of 150 billionnaires/country, though assuming unequal distribution (say America is 40% of this (8000+ billionaires); Russia, China, India, UK another 30% and the rest spread over the smaller countries. For millionaires instead of billionaires, that's 21 million.

How many billionaires are in the USA? 403 as of 2010. How many $ millionaires in the world? Maybe just short of 11 million in 2011. And for these sums to work, most of them would have to hold most of their assets in cash in offshore havens, rather than in (say) property where I suspect the majority of the USA millionaires come from. I think I see a tiny problem with this chap's calculations.

Minor problems like that aside, what should be done about it? Report author Mr. Henry has no doubts:

"The lost tax revenues implied by our estimates is huge. It is large enough to make a significant difference to the finances of many countries.
"From another angle, this study is really good news. The world has just located a huge pile of financial wealth that might be called upon to contribute to the solution of our most pressing global problems."

Of course! We can just take it. I can't see any problems with that, none at all. How would you seize it? Annex Jersey? Invade Switzerland? (good luck with that.) Beach landing in the Caymans? Then walk into the banks and seize all their computers. I'd pay money to watch that. Presumably it's held in a mixture of US dollar / CA dollar / GBP / Euro / CHF accounts rather than anything physical. You could just induce vicious inflation to deflate the value of the savers' accounts, which is the approach the US and UK governments seem to have taken anyway.

Sarcasm aside, the sheer cheek of Mr. Henry and the Tax Justice Network assuming you can arbitrarily make a claim on wealth by dint of wanting it ("society needs it") appalls me. Can he show any laws were broken in accumulating this money? Which governments get the claim on which assets? Do they claim on the wealth or on the alleged unpaid taxes? If taxes weren't paid that were due, why not lay a lien on the offender's public assets?

The issue of corruption and mass theft in poorer countries is a valid concern. Look at Ferdinand and Imelda Marcos - they probably took billions of dollars of assets out of the Philippines during the period of Marcos dictatorship. It's quite believable that this is stashed in tax haven accounts, but the Philippines hasn't been able to get any of it back as far as I know. This is one of the best examples of wealth that should be reclaimed, and yet the world can't make it happen - why not? Let's talk about African governments systematically looting their countries, and the Chinese senior Party members and military officials salting away their gains. Does the TJN report address this issue? Mr. Henry, I would bet the Chinese in particular will just roll over and give you their hard-earned cash. You should definitely go ask them.

What's going to happen to this tax-sheltered wealth? Eventually it needs to be spent, otherwise there's no point in having it. So it's going to be transferred into a US/UK/whatever bank account and spent on luxury goods or property, at which point the Govt. will take the appropriate tax cut. If you want to get hold of this money, your country needs to make things or services that the wealth holders want. Strangely, the record of governments in producing such goods is somewhat thin.