Gabriel Zucman on tax havens: "It is as if Earth was partly owned by the planet Mars."

From today's Le Monde, an interview with Gabriel Zucman of the London School of Economics and Berkeley, California. It nicely complements our Financial Secrecy Index, launched yesterday to widespread international media attention.

The interview co-incides with the launch yesterday of his book yesterday, La richesse caché des nations, about a subject dear to our hearts: tax havens and financial secrecy. Here is a short excerpt, translated from the French:

LM: You say that tax havens have never been so prosperous. Are the efforts to tackle them in vain?

Zucman: There has been some progress. But we are still at level zero, or thereabouts, as regards the fight against tax havens. The co-operation arrangements remain vague. The agreements signed under the aegis of the OECD to force offshore centres to exchange information on overseas taxpayers do not say how and when that will happen; which revenues are concerned, and which controls put in place. These are just pieces of paper predicting that one day, perhaps, automatic information exchange will be put in place.

And the data backs this up. There has never been as much money in tax havens as in 2013: according to my calculations, 8 percent of global financial assets are found in them, equivalent to 5.8 trillion Euros... Since 2009, the size of wealth in tax havens has risen by 25 percent, and by 14 percent in Switzerland. Everything remains to be done!

Zucman uses very different methods from ours for calculating the size of assets in secrecy jurisdictions: our estimates range between $21-32 trillion. The two approaches are measuring very different things, not least because of differences in which body is recording what data item. He gives an elegant description of his own methodology, spiced with the memorable phrase about the data gaps he is studying:

"It is as if Earth was partly owned by the planet Mars."

Hat tip: Antoine Dulin.

Now in case you missed it: take a look at our Financial Secrecy Index. And see a summary of it in The Economist, for example, or The Guardian.