The fractions of wealth held abroad are highly variable. In Europe, it is about 10 percent. In African and Latin countries, it is much higher—between 20 percent and 30 percent. In Russia, it is a whopping 52 percent. It follows that while tax havens hit wealthy nations hardest in absolute terms, they can have especially destructive effects on poorer or developing countries, because such a high percentage of their money is offshore.
.. Disturbingly, the new wealth is coming mostly from developing countries, which poses a serious problem in light of the severe strains on their limited budgets.
.. To see the importance of that inquiry, Zucman asks readers to imagine that a citizen of the United Kingdom holds an American security—say, stock in Google—in a bank account in Switzerland. In the United States, statisticians estimating US wealth overall will record a liability, because a foreigner owns US equities. But in Switzerland, statisticians will see nothing, and for a good reason: Google stock held in Switzerland by a UK resident will be, for Switzerland, neither an asset nor a liability.
.. Zucman notes that a global register of this kind could have other benefits, helping to combat the financing of terrorism, bribery, and money laundering; public and private corruption might be added to this list. He notes too (and here he will immediately lose some readers) that such a register could facilitate the imposition of a global wealth tax, of the sort proposed, very controversially, by Thomas Piketty.
.. To be sure, Zucman does not want everyone’s holdings to be visible on the Internet. A global institution could be required to maintain privacy. But many people would undoubtedly fear that it would not respect that requirement, and that people with nefarious purposes might be able to get access to it. And who, exactly, would serve as that global institution?
.. Zucman largely praises FATCA, but in the United States, the law has turned out to be highly controversial, and some people are loudly calling for its repeal or modification. One reason is expense. Foreign financial institutions are not at all happy with the considerable administrative burdens that it imposes. Another reason involves unintended adverse consequences. BecauseFATCA increases the costs of having American investors, it gives some foreign banks an incentive not to allow Americans to invest at all (or to charge them higher fees)