Tax havens (or tax havens) is one of those expressions that periodically dominate public debate. People express outrage when planet-wide scandals emerge, such as the Panama Papers; they scour the blacklists of countries that seem to encourage "clever dodgers"; they marvel at the ingenious tax schemes dreamt up by well-known multinationals. It is far rarer, however, to reflect in a more structured way on the dynamics of tax evasion and on the consequences we are all forced to pay for personally — beginning, once again, with the most vulnerable segments of the global population.

• The fight against poverty is still ongoing
• Are resources lacking? False
• Where the enormous capital of a few billionaires hides
• How much money is hidden in tax havens
• Tax havens drain resources from those entitled to them
• Why it is so difficult to tackle tax havens
• What can concretely be done for justice and transparency
• What tax havens exist around the world
  • The European Union's blacklist
  • Oxfam's blacklist
  • Tax Justice Network's ranking

The fight against poverty is still ongoing

If we want to reflect on how far apart tax havens and sustainability really are, we need to start from (apparently) a distance. According to the most recent data from the World Bank, referring to 2013, 10.7 per cent of the world's population (that is, 767 million people) live on less than $1.90 a day. Certainly, one cannot deny that great strides have been made: the first of the Millennium Development Goals (the predecessors of today's SDGs) called for the poverty rate to be halved compared to 1990, and that target was met in 2010, a full five years ahead of schedule.

That said, we cannot claim this war has been won. By signing the SDGs, world leaders committed to eradicating extreme poverty by 2030, but this goal is proving very difficult to achieve. Economic development over recent decades, the World Bank underlines, is turning out to be heavily unbalanced. 71 million people have been lifted out of extreme poverty in East Asia and the Pacific (above all in China and Indonesia); 37 million in South Asia (with major advances in India); but only 4 million in sub-Saharan Africa. We are talking about people who are increasingly difficult to reach, because they often live in rural and remote areas, are very young, and have no access to education.

Even those who have made it out, unfortunately, cannot always be considered entirely "out of danger". Consider, for example, the threat of climate change, which compromises food supply and quality of life across vast areas of the world, exacerbates tensions and conflicts, and risks creating one billion refugees by the end of this century (an estimate from the Asian Development Bank).

Read also: Natural disasters responsible for 26 million more people in poverty each year

Are resources lacking? False

And this brings us closer to the question of equity — including fiscal equity. Because our planet's problem is not a lack of resources; it is their unjust distribution. The World Inequality Report, the product of the colossal work of around a hundred researchers, has painted a disconcerting picture. Between 1980 and 2016, the wealthiest 1 per cent of the world's population pocketed twice as much of economic growth as the poorest 50 per cent. Over the last 35 years, inequalities have grown everywhere, with peaks in the United States, China, India and Russia.

Read also: World inequality report 2018. What the full report on global inequality says

According to the latest report published by Oxfam at the World Economic Forum in January 2018, the 42 wealthiest people in the world hold assets equal to those of the 3.7 billion poorest people. Economic growth appears strikingly one-directional: 82 per cent of the wealth created globally over the last 12 months, Oxfam's researchers continue, ended up in the pockets of the wealthiest 1 per cent of the population.

Read also: 42 multi-billionaires own the same wealth as 3.7 billion people

Where the enormous wealth of a few billionaires is hidden

It is precisely within this extremely narrow élite of the privileged that we find those who manoeuvre between deft accounting sleights of hand and shell companies. Some analyses carried out in the wake of the Panama Papers scandal go so far as to calculate that roughly half of the money hidden in tax havens belongs to those with a net worth exceeding 50 million pounds; in other words, to the 0.01 per cent of the super-rich. In Russia, this 0.01 per cent moves more than 50 per cent of its wealth offshore; in the United Kingdom, Spain, Germany and France, the figure stands at 30–40 per cent.

How much money is hidden in tax havens

But, in concrete terms, how much money is hidden in tax havens? Making an estimate is extremely difficult. Some recent studies put the figure at 10 per cent of global GDP (which, according to the World Bank, amounts to 75.6 trillion dollars). Tax Justice Network posits a figure of between 21,000 and 32,000 billion dollars.

Scholars Gabriel Zucman (who teaches at the University of Berkeley, California), Thomas Tørsløv and Ludvig Wier have focused on European tax havens, from which it is relatively easier to extract data because they must comply with the statistical guidelines imposed by Eurostat. According to the three researchers, every year 350 billion euros are diverted to Luxembourg, Ireland, the Netherlands, Malta and Cyprus, precisely to take advantage of their favourable tax treatment. We are talking predominantly about profits generated in other European countries, which end up being taxed, on average, at between 0 and 5 per cent.

Multinationals, the three academics continue, move more than 600 billion euros into tax havens every year. This amounts to around 45 per cent of their foreign profits, a percentage that rises as high as 63 per cent when focusing solely on large US companies.

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Tax havens drain resources from those who are entitled to them

We are talking about a disproportionate amount of profits that companies and billionaires move around at will, without paying what is owed to the state in which they were earned. That state would then be responsible for using tax revenues for welfare, healthcare, education and support for the most vulnerable. According to research conducted by Gabriel Zucman, the US loses the equivalent of around 45 billion euros a year in uncollected taxes, and the United Kingdom around 12.7 billion. The European Union as a whole sees roughly one fifth of its corporate taxes evaporate.