Berkeley economist Gabriel Zucman’s important new book “The Hidden Wealth of Nations: The Scourge of Tax Havens” estimates that as much as 8% of the world’s wealth, totaling $7.6 trillion, might be “hidden” in tax havens—and this is a conservative estimate including only bank deposits and readily marketed financial securities. The Tax Justice Network provided a broader estimate of global hidden wealth at between $21-32 trillion in 2012.

This useful summary of the book is from Reuven Avi-Yonah’s review posted on the Social Science Research Network:

Tax havens cost the world’s governments hundreds of billions of dollars a year, promote corruption, and undermine the rule of law. They are part of a larger worrisome pattern in which the world’s corporations outrun the governing capacity of states. A tax haven is a nation that refuses to cooperate with major countries in order to lure multinational corporations and investors to nominally book transactions in its locale. These transactions can be outright illegal, or borderline, but beyond the reach of legitimate tax authorities.

Gabriel Zucman, a young French economist now at the London School of Economics and the University of California at Berkeley, has written a masterful survey of the origins, importance, and dangers of tax havens. The Hidden Wealth of Nations is a tremendously important contribution to the current discussion of how to adjust the world’s income-tax systems, which are over a century old, to the realities of the 21st century.

Zucman makes three crucial contributions. First, he offers an absorbing account of how tax havens came into being in the period between the two world wars, and how they became much more important after exchange controls were relaxed in the 1980s. Second, Zucman delivers a far-reaching and rigorous quantitative evaluation of the scale and dynamics of tax havens in today’s global economy. And third, Zucman proposes remedies.

Read more discussion about the scale of tax avoidance and how to reduce it at these links:

Author Gabriel Zucman’s summary of his own book: theguardian.com

A review providing context on other recent analysis of tax avoidance:  timeshighereducation.com (note the first comments below this review, a well-orchestrated smear campaign using the familiar right-wing tactic of personal attacks to divert public attention from new analysis and policy)

The Financial Times review concluded by warning it’s readership: “In Piketty’s foreword, he urges all those interested in inequality, global justice and the future of democracy to read the book. The wealthy among them might want to take particular note. Attacking tax havens is a crucial first step to ratcheting up taxation on the rich. The more information there is about offshore assets, the harder they will be to defend”.

Tax Justice Network site: taxjustice.net

Tax Justice Network’s Financial Secrecy Index for nations: financialsecrecyindex.com

Tax Justice Network estimate of hidden wealth $21-32T (2012): taxjustice.net