Inequality: Are we really ‘all in this together’?

In his March 2015 Budget speech, Chancellor George Osborne emphasised that austerity measures over the 2010-15 Parliament had been fairly shared: inequality had fallen and the British people were ‘all in this together’. In this article, Gabriel Zucman examines how the UK stands in terms of the levels and changes in inequality of pre-tax and benefit income and net incomes. It also explores the role of the coalition government’s policies in influencing these outcomes

Taxing across borders: tracking personal wealth and corporate profits

This article attempts to estimate the magnitude of corporate tax avoidance and personal tax evasion through offshore tax havens. US corporations book 20 percent of their profits in tax havens, a tenfold increase since the 1980; their effective tax rate has declined from 30 to 20 percent over the last 15 years, and about two-thirds of this decline can be attributed to increased international tax avoidance. Globally, 8 percent of the world's personal financial wealth is held offshore, costing more than $200 billion to governments every year. Despite ambitious policy initiatives, profit shifting to tax havens and offshore wealth are rising. I discuss the recent proposals made to address these issues, and I argue that the main objective should be to create a world financial registry

The explosion in U.S. wealth inequality has been fuelled bystagnant wages, increasing debt, and a collapse in assetvalues for the middle classes

Income and economic equality have been on the rise in recent decades – but has this trend been fuelled only by increasing pay packets for the richest, or has wealth inequality risen as well? Emmanuel Saez and Gabriel Zucman find that over the past three decades the share of household wealth owned by the top 0.1 percent has increased from 7 to 22 percent. They write that the growing indebtedness of most Americans through mortgage and credit card obligations, combined with the collapse in the value of their assets during the Great Recession, and stagnant real wages have led to the erosion of the wealth share of the bottom 90 percent of families. They warn that without policies to reduce the concentration of wealth, such as estate taxes, within two decades the gains in wealth democratization which occurred in the New Deal and after World War II may well be lost

The End of Bank Secrecy? An Evaluation of the G20 Tax Haven Crackdown

During the financial crisis, G20 countries compelled tax havens to sign bilateral treaties providing for exchange of bank information. Policymakers have celebrated this global initiative as the end of bank secrecy. Exploiting a unique panel dataset, our study is the first attempt to assess how the treaties affected bank deposits in tax havens. Rather than repatriating funds, our results suggest that tax evaders shifted deposits to havens not covered by a treaty with their home country. The crackdown thus caused a relocation of deposits at the benefit of the least compliant havens. We discuss the policy implications of these findings

The missing profits of nations

By combining new macroeconomic statistics on the activities of multinational companies with the national accounts of tax havens and the world's other countries, we estimate that close to 40% of multinational profits are shifted to low-tax countries each year. Profit shifting is highest among U.S. multinationals; the tax revenue losses are largest for the European Union and developing countries. We show theoretically and empirically that in the current international tax system, tax authorities of high-tax countries do not have incentives to combat profit shifting to tax havens. They instead focus their enforcement effort on relocating profits booked in other high-tax places - in effect stealing revenue from each other. This policy failure can explain the persistence of profit shifting to low-tax countries despite the sizeable costs involved for high-tax countries. We provide a new cross-country database of GDP, corporate profits, trade balances, and factor shares corrected for profit shifting, showing that the global rise of the corporate capital share is significantly under-estimated

World Inequality Report 2022

We live in a data-abundant world and yet we lack basic information about inequality. Economic growth numbers are published every year by governments across the globe, but they do not tell us about how growth is distributed across the population – about who gains and who loses from economic policies. Accessing such data is critical for democracy. Beyond income and wealth, it is also critical to improve our collective capability to measure and monitor other dimensions of socio- economic disparities, including gender and environmental inequalities. Open-access, transparent, reliable inequality information is a global public good.This report presents the most up-to-date synthesis of international research efforts to track global inequalities. The data and analysis presented here are based on the work of more than 100 researchers over four years, located on all continents, contributing to the World Inequality Database (WID.world), maintained by the World Inequality Lab. This vast network collaborates with statistical institutions, tax authorities, universities and international organizations, to harmonize, analyze and disseminate comparable international inequality data