World's richest may be hiding $3.5 trillion from tax authorities
What's the story
Oxfam, a leading charity organization, has claimed that the world's wealthiest people may have hidden around $3.55 trillion from tax authorities. The charity made the claim in its latest report on offshore wealth. The study was building on the work of academics including the French economist Gabriel Zucman and the EU Tax Observatory.
Wealth accumulation
Total offshore wealth has grown to $13.25 trillion
Oxfam's report highlights that the total offshore wealth has grown significantly to $13.25 trillion in 2023. The charity also noted a major reduction in the amount of this hidden wealth since 2016, when a new automatic information exchange system between jurisdictions was introduced. However, Oxfam still estimates that about $3.55 trillion remains hidden from tax authorities, over 3% of global GDP.
Tax evasion
Richest 0.1% likely own 80% of hidden wealth
The report further suggests that around 80% of this hidden wealth is likely owned by richest 0.1% of households. This means this tiny fraction of the population holds untaxed assets equal to total wealth of half the world's poorest people. Oxfam's tax lead Christian Hallum said, This isn't just about clever accounting, it's about power and impunity. When millionaires and billionaires stash trillions of dollars in offshore tax havens, they place themselves above the obligations binding the rest of society.
Tax reform
Oxfam calls for progressive wealth tax
Oxfam is part of a global campaign pushing for a progressive wealth tax. The charity has also called for including countries in the global south in the Common Reporting Standard, which allows information exchange between jurisdictions. In the UK, Oxfam has urged Labour to impose a wealth tax after Chancellor Rachel Reeves raised capital gains tax and announced a new council tax surcharge on properties worth over £2 million.
Political support
Green Party backs call for wealth tax
The Green Party in England and Wales has also backed Oxfam's call for a wealth tax. The party's leader Zack Polanski said such a tax would be a day one priority if they were in government. He proposed an annual charge of 1% on assets worth over £10 million, including property, and 2% above £100 million. However, the Institute for Fiscal Studies think tank has suggested prioritizing reforms to existing taxes on wealth like council tax and capital gains.