The United States Internal Revenue Service (IRS) Building is seen in Washington on September 20, 2010. UPI/Kevin Dietsch | License Photo
LONDON, July 23 (UPI) -- The super rich have hidden at least $21 trillion, equal to the U.S. and Japanese gross domestic products combined, by exploiting tax-rule gaps, a report says.
The money, hidden in tax havens in countries such as Switzerland and the Cayman Islands, could actually be as much as $32 trillion, the economic transparency group Tax Justice Network said.
Report compiler James Henry, former chief economist at global management consulting firm McKinsey & Co., told the British newspaper The Guardian the elite's super-wealth is "protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy."
His report, titled "The Price of Offshore Revisited," suggests the Top 10 private banks -- including Swiss banking giants UBS AG and Credit Suisse Group AG, as well as U.S. investment bank Goldman Sachs Group Inc. -- managed more than $6.25 trillion of this money in 2010, up from $2.3 trillion in 2005.
The report, using information from the Swiss-based Bank of International Settlements -- which is not accountable to any national government -- the International Monetary Fund and other sources, suggests that many developing countries would have more than enough to pay off their debts to the rest of the world if the capital hadn't flowed out of their economies since the 1970s.
The amount of money hidden out of reach of tax authorities is so great that standard measures of income inequality drastically undervalue the true gap between rich and poor, the report said.
About $10 trillion in assets is owned by only 92,000 people, or 0.001 percent of the world's population, the report said.
The "huge, secretive offshore industry has truly become the dark side of globalization," the report concluded. It urged renewed efforts by developed countries to gain a handle on the problem.
Questions about offshore accounts and tax shelters have recently become a point of contention in the U.S. presidential campaign.
Democrats have accused presumptive Republican presidential nominee Mitt Romney of stashing some of his wealth in offshore banks to avoid taxes.
Romney campaign spokesman Andrea Saul dismissed those allegations July 8 as an "unfounded character assault" on Romney that is "unseemly and disgusting."