Global Justice Now press release:
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Much more wealth is leaving the world’s most impoverished continent than is entering it, according to new research into total financial flows into and out of Africa. The study finds that African countries receive $161.6 billion in resources such as loans, remittances and aid each year, but lose $203 billion through factors including tax avoidance, debt payments and resource extraction, creating an annual net financial deficit of over $40 billion.
Stanford University researchers teamed with officials at the Treasury Department to examine every tax return reporting more than $1 million in earnings in at least one year between 1999 and 2011. They found that while 2.9 percent of the general population moves to a different state in a given year, just 2.4 percent of millionaires do so. Even more striking is that for the most “persistent millionaires” (those earning over $1 million in at least 8 years of the researchers’ sample), the migration rate is just 1.9 percent per year. As the researchers explain: “millionaires are not searching for economic opportunity—they have found it.” …
In other words, Florida is only one of the nine states without broad-based income taxes that seems to possess any kind of special allure for high-income taxpayers. Given that reality, the study notes that “It is difficult to know whether the Florida effect is driven by tax avoidance, unique geography, or some especially appealing combination of the two.” In any case, this study refutes the notion that repealing state income taxes can transform a state into a magnet for high-income taxpayers: it’s simply not playing out that way in eight of the nine states without such a tax. …
This research, of course, should all but kill the thesis that you just have to cut taxes on rich folk for fear they’ll flee to more hospitable climes. But this thesis is just too convenient for too many wealthy people, and it’s been successfully put out of its misery many times before – then sprung back to life the next time around. This isn’t the last we’ve seen of it.
New Research Shows Millionaires Less Mobile than the Rest of Us
As Guest Editor David Whyte (How Corrupt is Britain?) comments in his editorial:
“We are overwhelmed by the scale, frequency and variety of corruption cases in Britain, from police manipulation of evidence, to over-charging in out-sourced public contracts, by way of cash-for-access scandals involving prominent politicians and price fixing, market manipulation and fraud in key sectors of the economy.”
TJN has long held the view that Britain is at the forefront of the global supply side of corruption. Ten years ago TJN’s director John Christensen slammed the Transparency International Corruption Perceptions Index for corrupting perceptions of corruption, arguing that:
“The elephant in the living room of the corruption debate is the role played by the global infrastructure of banks, legal and accounting businesses, tax havens and related financial intermediaries in providing an offshore interface between the illicit and licit economies.”