A UC Berkeley study shows just how better rich people are at avoiding taxes and why it makes the wealth gap worse.
A recent study out of UC Berkeley essentially confirms what many have known and directly felt the ramifications of for far too long — the rich are far better at evading taxes than everyone else and it directly impacts the increasing wealth gap.
“We find that tax evasion rises sharply with wealth – a phenomenon that random audits fail to capture.
On average about 3 percent of personal taxes are evaded in Scandinavia but this figure rises to about 30 percent in the top 0.01 percent of the wealth distribution – a group that includes households with more than $40 million in net wealth’ the study said.
The study is based on massive leaks in recent years such as ‘the 2007 leak of data on more than 30,000 clients of banking conglomerate HSBC’s Swiss private banking subsidiary and the 2016 ‘Panama Papers’ leak of names and addresses of owners of shell companies created by Panamanian firm Mossack Fonseca’ according to the Times.
The leaks allowed them to conduct the study and make a judgment about some of the — otherwise unknown — impacts of tax evasion.