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Trillions Hidden From U.S. Taxman in Caribbean Offshore Accounts

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moneyA new report says the wealthiest people in the world have exploited loopholes in international tax rules, evading the taxman and sheltering $21 trillion or more in offshore accounts in the Caribbean and other places.

The report, released here by the economic transparency group Tax Justice Network, titled “The Price of Offshore Revisited”, noted that between $21 trillion and $32 trillion could be hidden in tax havens in countries like Switzerland and the Cayman Islands.

The report said that about $10 trillion stashed away in off-shore accounts is owned by only 92,000 people, or 0.001 percent of the world’s population.

“These estimates reveal a staggering failure: inequality is much, much worse than official statistics show,” said John Christensen of the Tax Justice Network.

“People on the street have no illusions about how unfair the situation has become,” he added.

The report notes that private banks and investment firms have enabled these wealthy individuals and corporations to take advantage of loopholes and gaps in cross-border tax rules.

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Questions about offshore accounts and tax shelters has recently become a major point of contention in the U.S. presidential campaign, with Democrats accusing Republican candidate Mitt Romney of stashing some of his wealth in offshore banks in the Cayman Islands to avoid taxes.

But Romney’s campaign dismissed the allegations as an “unfounded character assault.”

Tax Justice Network said almost every country has suffered from the billions of dollars in lost tax revenue, adding that sub-Saharan Africa and oil producing states like Saudi Arabia have been especially hard hit.

In some cases, the total worth of these hidden assets far exceeds the international debts owed by these countries, Tax Justice Network said, noting that it compiled the report using thousands of data and sources, including information from the International Monetary Fund (IMF).

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