POLITICS

The World's 1% Are Richer Than You Could Possibly Imagine

07/08/2014 13:00 BST | Updated 07/08/2014 13:59 BST
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The world's richest people, better known as "the 1%", are much wealthier than it is possible to calculate, according to shocking new research.

Many of the world's richest individuals have amassed incalculable wealth as they "hide their cash in tax shelters or don't respond to questionnaires" about how wealthy they are, according to two separate studies, one by European Central bank economist Philip Vermeulen and the other by London School of Economics’ Gabriel Zucman.

Zucman's data showed that America's richest 0.1%, who have at least $20 million (£11 million) in net wealth, had at least 23.5% of the country's wealth in 2012, up from 21.5% from previous estimates.

Zucman also estimated that Europe's richest 1% have 10% of their wealth in offshore accounts, while US individuals store 4% of their assets abroad.

The amount hidden away by the global super-rich is so vast that the resulting corrections needed to income data cancel out nearly all of the progress from 1988 to 2008 in narrowing the gap between the world's rich and poor, World Bank research found.

This has led to governments losing out on billions from "nonpayment of income, investment, inheritance and estate taxes", with the US government estimated to have "lost" $36 billion (£21.4 billion), while the EU lost €75bn (£60 billion).

Accountant and tax avoidance campaigner Richard Murphy said there was "no surprise" in the findings.

"It has been my contention...for years that one of the main purposes of so called tax havens has been to provide secrecy. That’s why I call them secrecy jurisdictions," he wrote on his blog.

"Secrecy jurisdictions' secrecy has worked. That is not by chance. It has been by design. That is why the above definition has changed perception on this issue, I think. As a result the full extent of the wealth of the 1% has been hidden from view."

Nobel-prize winning economist Joseph Stiglitz told Bloomberg: “We always suspected there was some low-balling of the top 1 percent."

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