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40 percent of the rich are hiding their money in tax havens

Paul Krugman of the New York Times pointed out in a column Friday, "At the commanding heights of the U.S. economy, hiding a lot of one’s wealth offshore is probably the norm, not the exception."

By Aileen Graef

BERKELEY, Calif., April 14 (UPI) -- More wealthy Americans are hiding their funds in tax havens overseas, giving the appearance of less wealth while maintaining their assets.

A new study conducted by Professors Emmanuel Saez and Gabriel Zucman at UC Berkeley says that 40 percent of the rich are routing their investments through offshore tax havens. These havens are in the Cayman islands, the British Virgin islands, and Luxembourg, among others, and prevent the wealthy from having to pay taxes on the income.

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Since these assets have gone unrecorded, it has created statistical anomalies showing that despite the fact that the rich are richer than ever, the world economy doesn't show it. Zucman posits in the report that if this unrecorded wealth were recorded, the Eurozone would shift from a net debtor to a net creditor and the U.S. would see a significant reduction in net debt.

This report comes at a time when the inequality gap between the rich and poor is the widest it's ever been, with many disappointed as the U.S. Congress stalls raising the minimum wage and extending unemployment benefits in a slowly recovering economy.

[HuffPost Live]

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