Hidden wealth estimates vary widely. Many of them only take a partial
look at the most basic methods of offshoring wealth. Given the
unprecedented growth of wealth over the past generation, the secretive
methods used to hide it have evolved far beyond well-known tax havens in
Switzerland and small-island jurisdictions such as the Bahamas. While
estimates based on banking secrecy and tax havens help to give us a more
accurate picture of overall wealth, they do not give a total view.
Research by Gabriel Zucman, which analyzed banking secrecy, estimated that “around 8% of the global financial wealth of households is held in tax havens.” If we correlate this 8% with the $82 trillion in accounted for wealth reported by the Federal Reserve, that would be an additional $6.6 trillion for the wealthy, bringing the richest 1% up to roughly $39 trillion in overall wealth.
However, to get a more complete understanding of the reality of the situation, the most wide-ranging look into hidden wealth was done in 2012 by economist John Henry in partnership with the Tax Justice Network (TJN). They estimated that there was $21- $32 trillion hidden globally at the end of 2010. As shocking as that sounds, that estimate still did not give a complete view of hidden wealth. As they put it, “We consider these numbers to be conservative. This is only financial wealth and excludes a welter of real estate, yachts and other nonfinancial assets owned via offshore structures.”
We also need to consider that overall US household wealth is up 30% and has increased by $25 trillion since the end of 2010. Globally, High Net Worth Individual investible wealth has increased 19% since then, and has begun to accelerate at a record pace. In 2013, it increased globally by 14%, with a 17% increase in North America, which is now at an all-time high. Given these factors, and several others that will be explained below, the higher TJN estimation of $32 trillion in 2012 is conservative today.
Correlating TJN’s wealth estimates with US distribution percentages is not an exact science but it gives a much more accurate total of overall wealth than excluding it. Based on TJN’s estimation, Ultra High Net Worth Individuals (UHNWI) accounted for 48% of hidden wealth. If we correlate that to the overall estimate of $32 trillion, it equates to $15.4 trillion for the UHNWI population.
The US accounts for 35% of the UHNWI population, which correlates to $5.4 trillion. In the next tier, High Net Worth Individuals (HNWI) also accounted for 48% of hidden wealth. The US currently has 42% of the HNWI population, which correlates to $6.5 trillion. The additional 4% of hidden wealth is estimated to be held below the economic top 1% of the US population, which correlates to roughly $538 billion.
This brings the estimated total of hidden US wealth to $12.4 trillion, with $11.9 trillion of that held within the top 1%. We can now estimate that the top .01% has $14.5 trillion in wealth, the top .1% has $26.4 trillion and in total the top 1% has $44.5 trillion.
Read more: How Shadow Banking and Extreme Wealth Inequality Threaten Us | Alternet
Research by Gabriel Zucman, which analyzed banking secrecy, estimated that “around 8% of the global financial wealth of households is held in tax havens.” If we correlate this 8% with the $82 trillion in accounted for wealth reported by the Federal Reserve, that would be an additional $6.6 trillion for the wealthy, bringing the richest 1% up to roughly $39 trillion in overall wealth.
However, to get a more complete understanding of the reality of the situation, the most wide-ranging look into hidden wealth was done in 2012 by economist John Henry in partnership with the Tax Justice Network (TJN). They estimated that there was $21- $32 trillion hidden globally at the end of 2010. As shocking as that sounds, that estimate still did not give a complete view of hidden wealth. As they put it, “We consider these numbers to be conservative. This is only financial wealth and excludes a welter of real estate, yachts and other nonfinancial assets owned via offshore structures.”
We also need to consider that overall US household wealth is up 30% and has increased by $25 trillion since the end of 2010. Globally, High Net Worth Individual investible wealth has increased 19% since then, and has begun to accelerate at a record pace. In 2013, it increased globally by 14%, with a 17% increase in North America, which is now at an all-time high. Given these factors, and several others that will be explained below, the higher TJN estimation of $32 trillion in 2012 is conservative today.
Correlating TJN’s wealth estimates with US distribution percentages is not an exact science but it gives a much more accurate total of overall wealth than excluding it. Based on TJN’s estimation, Ultra High Net Worth Individuals (UHNWI) accounted for 48% of hidden wealth. If we correlate that to the overall estimate of $32 trillion, it equates to $15.4 trillion for the UHNWI population.
The US accounts for 35% of the UHNWI population, which correlates to $5.4 trillion. In the next tier, High Net Worth Individuals (HNWI) also accounted for 48% of hidden wealth. The US currently has 42% of the HNWI population, which correlates to $6.5 trillion. The additional 4% of hidden wealth is estimated to be held below the economic top 1% of the US population, which correlates to roughly $538 billion.
This brings the estimated total of hidden US wealth to $12.4 trillion, with $11.9 trillion of that held within the top 1%. We can now estimate that the top .01% has $14.5 trillion in wealth, the top .1% has $26.4 trillion and in total the top 1% has $44.5 trillion.
Read more: How Shadow Banking and Extreme Wealth Inequality Threaten Us | Alternet
