Subscribe to our social channels to get the latest news about Hungary!
IT
Shocking figures: The ultra-rich’s untaxed wealth revealed
Change language:
The world’s wealthiest have been operating an invisible financial system for decades, siphoning trillions of dollars out of the public purse. A recent report has revealed shocking figures: the untaxed wealth of the richest 0.1% exceeds what the poorer half of the world collectively owns.
More money hidden offshore
Exactly ten years after the Panama Papers scandal, Oxfam published a report showing that the richest 0.1% of the world hide a total of USD 2.84 trillion in untaxed offshore accounts. This sum surpasses the combined wealth of the planet’s poorest 4.1 billion people – the entire bottom half of humanity.
In total, private wealth hidden offshore reaches USD 3.55 trillion, roughly equivalent to the entire annual economic output of the United Kingdom and more than twice the combined GDP of the world’s 44 least-developed countries.
Christian Hallum, Oxfam’s tax expert, said that the business model of tax havens remains highly resilient:
“The ultra-rich employ teams of wealth managers and accountants who constantly devise new ways to avoid taxes. This is not just accounting cleverness; it’s a matter of power and impunity.”
The top 0.01%
The distribution is extremely unequal: roughly 80% of all untaxed offshore wealth is held by the richest 0.1%. Within this group, the top 0.01% alone controls over USD 1.77 trillion – all hidden from tax authorities.
Hallum emphasised:
“If the ultra-rich control 80% of all offshore wealth, the offshore industry will continue to flourish unless extreme inequality is addressed. Wealth taxes alone won’t solve the problem, but they are an essential part of the solution.”
Why can’t they stop it?
To improve global transparency, the Automatic Exchange of Information (AEOI) system was created, with 126 jurisdictions signed up, including Singapore and the British Virgin Islands. Yet gaps remain: for many developing countries, building the complex infrastructure required to participate is costly and complicated.
For example, Ghana signed the Common Reporting Standard in 2014 but only started receiving data in 2022, after spending nearly USD 1 million to set up the necessary system. For many developing nations, even this is not feasible, leaving much offshore wealth invisible.
Possible solutions: Wealth tax and global registry
Oxfam puts forward two key proposals:
- The introduction of progressive wealth taxes on the ultra-rich in G7 countries.
- A global asset registry to map actual ownership and dismantle offshore structures hiding companies and trusts.
Hallum argues that a combination of these measures is key to structural change, ensuring the ultra-rich contribute fairly to the societies in which they operate.
European snapshot: Greece at the top
According to the EU Tax Observatory, Greece leads the EU in terms of offshore wealth relative to GDP, with offshore holdings reaching nearly 80% of its GDP and corporate tax losses amounting to 47% – the highest rate in Europe.
Germany follows with 29%, Estonia with 24%, and France and the UK each with 16%. Most of Greece’s offshore wealth is held in Switzerland, with Luxembourg, Cyprus, and the Channel Islands also among the most popular destinations for hidden wealth.
Without structural reforms and genuine global cooperation, the offshore system will continue to act as a safety valve for the world’s richest – at the expense of everyone else.
If you missed it:
I would rather people’s wealth range from super rich to super poor, with opportunities to change one’s fortunes than for everyone to be equally poor, which is what the “progressive” proposals would cause.
Michael when you have “super poor” you will get more crime with associated costs and you create a multi-generational effect. Poor families that can’t feed their children properly end up producing poorly developed adults who are not productive. Fidesz interestingly likes to dabble in “progressive” proposals to attract votes with such things as no income tax on mothers with three children and caps on the prices of some food staples. The problem with the no income tax idea is that the people who will benefit from it the most are the wealthy who have three children. Imagine a female lawyer with three children raking in money and not paying a dime of income tax.
Meanwhile, the young from poorer background who might love to have three children cannot afford to house them due to surreal house prices in Hungary, so they have none at all while paying 33.5% total deducations on even minimum wage. It’s a conscious decision on the part of the government to encourage higher earners to be more productive when it comes to childrearing. The issue is that metropolitan high earners are too busy enjoying the good life to want to spoil their living standard with more than one child and saving income tax is insufficient inducement. Those that could be rearing Hungary’s children are priced out of doing so in order that private equity funds invested in house building can derive more yield.
Here’s an idea that would genuinely get the birthrate sizzling. Offer couples having three children or more a zero rent apartment owned by the local authority. Not low interest loans and mortgages to try (and fail) to buy overpriced property. The guarantee of a stable place to live at ZERO rent would have youngsters copulating like mad. It wouldn’t even cost the government all that much as the only loss is an otherwise means tested rent while the state retains ownership of the freehold to sell or rent out in the future while the asset remains on the balance sheet.
hy