Global financial capitalism - header

Global financial capitalism: offshore wealth and tax havens

It is well known that much wealth is held 'offshore', and that global financial flows play a crucial role in the accumulation of wealth. Strategies for tax reform frequently rub up against claims that wealth will be moved off shore should taxation be increased. It is therefore vital to have a better understanding of the dimensions of offshore wealth holding and global financial flows. Our projects use new data sources to develop a fuller understanding of these issues, and combine qualitative insights to develop a global analysis of the contemporary wealth distribution. 

Recent highlights...

Cluster members

Expand section to find out more about the academics working on Global financial capitalism: offshore wealth and tax havens



Dr Arun Advani
Visiting Fellow
International Inequalities Institute


Aroop Chaterjee
Southern Centre for Inequality Studies, Witwatersand University)


Emma Chamberlain - Photo - International Inequalities Institute - III - LSE - London School of Economics - Senior Visiting Fellow - June 2020

Emma Chamberlain
Visiting Professor in Practice
International Inequalities Institute


Luna Glucksberg
Research Fellow
International Inequalities Institute


Dr Eleni Karagiannaki
Research Fellow, CASE, LSE


Professor Camille Landais
Professor of Economics, Department of Economics LSE


Tim Monteath
PhD candidate, Sociology LSE



Professor Parthasarathi Shome
Visiting Senior Fellow
International Inequalities Institute


Dr Andrew Summers
Assistant Professor of Law
Department of Law



Dr Nora Waitkus
Research Officer, International Inequalities Institute LSE


Expand section to find podcasts with cluster members and other academics

The Economic Consequences of Major Tax Cuts for the Rich - Inequalities Seminar Series

Tuesday 02 February 2021

Speakers: Dr David Hope and Dr Julian Limberg 

Chair: Dr Luna Glucksberg 

The last 40 years have seen a substantial fall in taxes on the rich across the OECD countries. This coincided with a period of rising income inequality, especially in the Anglo-Saxon countries. Given the difficulties of establishing causality from cross-country panel studies, however, the extent to which tax cuts on the rich have driven up income inequality remains an open empirical question. This paper aims to fill that gap in the literature by using new matching techniques for panel data to estimate the causal effect of major tax cuts on the rich on income inequality. As proponents of tax cuts on the rich often argue for their beneficial effects on economic performance due to efficiency gains and the reduction of behavioural distortions, we also estimate the effects of major tax cuts on the rich on economic growth and unemployment. Our analysis finds strong evidence that cutting taxes on the rich increases income inequality but has no effect on growth or unemployment. Overall, this new research suggests that lower taxes on the rich have made a significant contribution to increased income inequality in the OECD countries since the 1980s, with no offsetting gains in economic performance.

Video available here

Podcast available here

Report of the UK Wealth Tax Commission 

Wednesday 09 December 2020 

Hosted by The International Inequalities Institute, the Department of Law, and the CAGE Research Centre at the University of Warwick

Speakers: Dr Andrew Summers, Dr Arun Advani, and Emma Chamberlain 

Chair: Professor Sir Tim Besley

The unprecedented public spending required to tackle COVID-19 has been followed by debates about how to rebuild public finances and tackle inequalities exposed by the crisis. This event launched the final report of a major new project investigating the desirability and feasibility of a ‘wealth tax’ for the UK. Building on contributions by a network of world-leading experts on tax policy, the report will make recommendations to government on how to tax wealth more effectively.

Video available here

Podcast available here

How Much Tax Do The Rich Really Pay And Could They Pay More? 

Monday 15 June 2020

Speakers: Dr Arun Advani, Emma Agyemang, Helen Miller, Dr Andy Summers, and Ed Conway

Chair: Professor Mike Savage

The rich, it is often claimed, already contribute a large share of tax revenues; there's not much scope for them to pay more. For example, the top 1% already pay 29% of all income tax. But is this because they pay a lot of their income in tax, or just because they have a lot of income? Researchers from LSE and Warwick presented new findings using confidential tax data to reveal the taxes actually paid by the UK's top 1%. They explored the gap between headline tax rates and the rates that the richest really pay, taking into account income from all sources as well as deductions and tax reliefs. The presentation was followed by a panel discussion of the implications for taxing the rich after coronavirus. How much revenue could be raised from the top 1%? What are the alternatives and trade-offs involved? Is it fair to ask the rich to pay more at a time of national crisis? When is the right time to raise taxes on the rich, and how?

Video available here

Podcast available here

Strategies for Taxing Wealth: an academic and policy exchange 

Monday 15 June 2020

Session 1 - The politics of major tax reform

Chair: Dr Nora Waitkus (LSE)

Speakers: Robert Palmer (Tax Justice UK): 'Public Attitudes on Public Spending, Tax and Wealth'. See interim report here

Hendrik Theine (Vienna University): 'What About Wealth Taxation? The News Media Coverage in Germany'. See paper here

Julian Limberg (KCL): 'What Determines Taxes on the Rich in Peacetime?’. See slides here

Video available here

Session 2 - Wealth taxes: modelling and enforcement

Chair: Dr Luna Glucksberg (LSE)

Speakers: Alejandro Esteller More (University of Barcelona): 'The Long-Run Redistributive Power of the Net Wealth Tax'. See paper here 

Andres Knobel (Tax Justice Network) and Louise Russell-Prywata (LSE / OpenOwnership): 'Towards an Asset Register for the UK and Beyond'. See Andres' paper here

Daniel Reck (LSE): 'Tax Evasion by the Wealthy: measurement and implications'. See paper here

Video available here

The Missing Billions: Measuring Top Incomes in the UK - Inequalities Seminar Series

Tuesday 05 February 2019

Speaker: Dr Andrew Summers

The tax data currently used to measure top incomes in the UK only include sources that are subject to Income Tax. Sources taxed on any other basis (or not at all) disappear from statistics on income inequality: for example, much of the income arising to non-domiciled residents, all capital gains whether realised or not, and tax-exempt returns on savings and investments. I map these and other missing sources and provide evidence that they are quantitatively important for the estimation of top income shares. The effect is large because the scope of taxable income in the UK is unusually narrow, and subject to exemptions that disproportionately favour the richest; so far, no attempt has been made to correct for this in national statistics. The missing sources that I identify cast doubt on the prevailing narrative that UK income inequality has stabilised or fallen since the last financial crisis. I provide initial indications that once these sources are added, the top one percent share may be seen to have risen since 2008 and could be much closer to US levels than conventionally thought.

Podcast available here

The Challenge of Richness? Rethinking the Giant of Poverty 

Tuesday 20 February 2018

Speakers: Dr Tania Burchardt, Amy Feneck, Dr Sam Friedman, and Dr Luna Glucksberg

The economic and political power of the richest in our society has dramatically increased since 1942. 75 years on since his report, the panel discussed whether Beveridge’s concern with poverty now needs to be extended to include a concern with richness.

Podcast available here

The Myth of Millionaire Tax Flight: how place still matters for the rich 

Monday 20 November 2017

Speakers: Dr Cristobal Young, Dr Andrew Summers, and Rt Hon Ed Miliband MP

Chair: Professor Nicola Lacey

If taxes rise, will they leave? Cristobal Young presented his findings from the first-ever large-scale study of migration of the world’s richest individuals, drawing on special access to over 45 million US tax returns, together with Forbes rich lists. He showed that contrary to popular opinion, although the rich have the resources and capacity to flee high-tax places, their actual migration is surprisingly limited. Place still matters, even in today’s globalised world.

Video available here

Podcast available here

Taxing the Rich (III Annual Conference) (2016)

Speakers: Professor John Hills, Deborah Hargreaves, and Professor David Soskice 

Video available here

Taxing the Rich: a history of fiscal fairness in the United States and Europe 

Wednesday 12 October 2016

Speaker: Professor David Stasavage 

Chair: Professor David Soskice

In today's social climate of growing inequality, why are there not greater efforts to tax the rich? David Stasavage asked when and why countries tax their wealthiest citizens.

Video available here


Expand section to find related topical publications by cluster members and other academics

A wealth tax for the UK: Final report of the Wealth Tax Commission (2020)

Authors: Arun Advani, Emma Chamberlain, Andy Summers

It has been nearly half a century since a wealth tax was last seriously considered in the UK. Fifty years on, much has changed in the economic circumstances of the UK, the technological capacity to administer a wealth tax, and the requirements on disclosure of offshore wealth. Old plans therefore cannot simply be picked ‘off the shelf’. And yet, at a time when we face the largest public finance crisis since the Second World War, there is clearly a renewed urgency to ‘think big’ on tax policy. We felt that the lack of a robust evidence base on wealth taxes risked leaving the UK unprepared for this critical debate.

This project is funded by the LSE COVID-19 Rapid-Response Fund; the LSE International Inequalities Institute (by a grant from the Atlantic Philanthropies Foundation).

Watch a video of the report launch event here

Watch a TLDR News explainer video here

Taxing Hidden Wealth: The Consequences of U.S. Enforcement Initiatives on Evasive Foreign Accounts (2019)

Authors: Niels Johannesen, Patrick Langetieg, Daniel Reck, Max Risch, Joel Slemrod

In 2008, the IRS initiated efforts to curb the use of offshore accounts to evade taxes. This paper uses administrative microdata to examine the impact of enforcement efforts on taxpayers’ reporting of offshore accounts and income. We find that enforcement caused approximately 50,000 individuals to disclose offshore accounts with a combined value of about $100 billion. Most disclosures happened outside offshore voluntary disclosure programs, by individuals who never admitted prior noncompliance. Disclosed accounts were concentrated in countries often characterized as tax havens. Enforcement-driven disclosures increased annual reported capital income by $2-$4 billion, corresponding to $0.6-$1.2 billion in additional tax revenue.

A gendered ethnography of elites: Women, inequality, and social reproduction (2018)

Author: Luna Glucksberg

Keywords: Alpha Territories, class, elites, ethnography, gender, wealth transfer

Summary: This article offers a critical ethnography of the reproduction of elites and inequalities through the lenses of class and gender. The successful transfer of wealth from one generation to the next is increasingly a central concern for the very wealthy. This article shows how the labor of women from elite and non-elite backgrounds enables and facilitates the accumulation of wealth by elite men. From covering “the home front” to investing heavily in their children’s future, and engaging non-elite women’s labor to help them, the elite women featured here reproduced not just their families, but their families as elites. Meanwhile, the aff ective and emotional labor of non-elite women is essential for maintaining the position of wealth elites while also locking those same women into the increasing inequality they help to reproduce.

Private Wealth and Public Revenue in Latin America (2017)

Author: Tasha Fairfield

Summary: Inequality and taxation are fundamental problems of modern times. How and when can democracies tax economic elites? This book develops a theoretical framework that refines and integrates the classic concepts of business’s instrumental (political) power and structural (investment) power to explain the scope and fate of tax initiatives targeting economic elites in Latin America after economic liberalization. In Chile, business’s multiple sources of instrumental power, including cohesion and ties to right parties, kept substantial tax increases off the agenda. In Argentina, weaker business power facilitated significant reform, although specific sectors, including finance and agriculture, occasionally had instrumental and/or structural power to defend their interests. In Bolivia, popular mobilization counterbalanced the power of economic elites, who were much stronger than in Argentina but weaker than in Chile. The book’s in-depth, medium-N case analysis and close attention to policymaking processes contribute insights on business power and prospects for redistribution in unequal democracies.

Top incomes and inequality in the UK: reconciling estimates from household survey and tax return data (2017)

Authors: Richard V. Burkhauser, Nicolas Herault, Stephen P. Jenkins, Roger Wilkins

Keywords: UK inequality, top incomes, household survey data, tax return data

Summary: This paper provides the first systematic comparison of UK inequality estimates derived from tax data (World Wealth Income Database) and household survey data (the Households Bewlo Average Income [HBAI] subfile of the Family Resources Survey). It documents by how much existing survey data underestimate top income shares relative to tax data.

The Role of Automatic Stabilizers in the US Business Cycle (2016)

Authors: Alisdair McKay, Ricardo Reis

Keywords: Countercyclical fiscal policy, heterogeneous agents, fiscal multipliers

Summary: Most countries have automatic rules in their tax‐and‐transfer systems that are partly intended to stabilize economic fluctuations. This paper measures their effect on the dynamics of the business cycle.

The changing distribution of individual incomes in the UK before and after the recession (2015)

Authors: Eleni Karagiannaki and Lucinda Platt

Keywords: income, Great Recession, income distribution, United Kingdom 

Summary: Using pooled data from the Family Resources Survey, this paper addresses the question of which groups gained and which lost in terms of their individual income between 2005-2008 and 2009-20012.

Inequality: What Can Be Done? (2015)

Author: Anthony B. Atkinson

Keywords: inequality, public policy, poverty, income distribution, developed countries 

Summary: This book presents a comprehensive set of policies that could bring about a genuine shift in the distribution of income in developed countries. The book argues that problem is not simply that the rich are getting richer, but that society is failing to tackle poverty, and the economy is rapidly changing to leave the majority of people behind. To reduce inequality, the book argues that society has to go beyond placing new taxes on the wealthy to fund existing programs. The book thus recommends ambitious new policies in five areas: technology, employment, social security, the sharing of capital, and taxation.

Falling behind, getting ahead: the changing structure of inequality in the UK, 2007-2013 (2015)

Authors: John Hills, Jack Cunliffe, Polina Obolenskaya, Eleni Karagiannaki

Keywords: qualifications, employment, wealth, economic crisis, United Kingdom 

Summary: This report contains a detailed examination of the qualifications, employment, pay, incomes and wealth of different groups since the economic crisis. It shows that the legacy of the crisis has not fallen evenly. Across a range of outcomes, people in their twenties have lost most, despite higher qualifications than any earlier generation.

Income distribution and taxation in Mauritius: A seventy-five year history of top incomes (2015)

Author: Anthony B. Atkinson 

Keywords: Mauritius, income distribution, taxation, 

Summary: The purpose of this paper is to provide new evidence of the historical distribution of income in Mauritius, one that has been somewhat neglected due to historical information being very limited.

Top Income Shares, Business Profits, and Effective Tax Rates in Contemporary Chile (2015)

Authors: Tasha Fairfield, Michel Jorratt De Luis

Keywords: inequality, Latin America, D31, taxation, top incomes, unrealized captial income

Summary: We contribute to research on inequality and world top incomes by presenting the first calculations of Chilean top income shares and effective tax rates using individual tax return microdata from 2005 and 2009. We pay special attention to business income, which dominates at the top. Our analysis includes not only distributed profits, but also the large proportion of accrued profits retained by firms, which are rarely analyzed given the difficulty of identifying individual owners. Our most conservative top 1 percent income‐share estimate is 15 percent—the fifth highest in the top incomes literature. When distributed profits are adjusted for evasion, the top 1 percent share reaches 22–26 percent. When we broaden the income concept to include accrued profits, which we impute to taxpayers using ownership shares calculated from business tax forms, the top 1 percent share increases to a minimum of 23 percent. Despite this impressive income concentration, the top 1 percent pays modest average effective income‐tax rates of 15–16 percent.

Public Economics in an Age of Austerity (2014)

Author: Anthony B. Atkinson

Keywords: public economics, austerity, ageing population, education, income tax, capital, social security contributions 

Summary: This book describes how public economics can help society to think about alternative ways of meeting the challenges of an ageing population, increased investment in education, and climate change. It casts doubt on conventionally held views, such as those concerned with top tax rates, the undesirability of taxing capital income, the targeting of child benefits, and the merging of income tax and social security contributions.

Going Where the Money Is: Strategies for Taxing Economic Elites in Unequal Democracies (2013)

Author: Tasha Fairfield

Keywords: comparative politics, Latin America, economic elites, inequality, tax reform, politics of policymaking

Summary: How can policymakers circumvent obstacles to taxing economic elites? This question is critical for developing countries, especially in Latin America where strengthening tax capacity depends significantly on tapping under-taxed, highly-concentrated income and profits. Drawing on diverse literatures and extensive fieldwork, the paper identifies six strategies that facilitate enactment of modest tax increases by mobilizing popular support and/or tempering elite antagonism. Case studies from Chile, Argentina, and Bolivia illustrate the effect of these strategies on the fate of tax reform initiatives. The analysis builds theory on tax politics and yields implications for research on reform coalitions and gradual institutional change.

The Relative Role of Socio-Economic Factors in Explaining the Changing Distribution of Wealth in the US and the UK  (2013)

Authors: Frank Cowell, Eleni Karagiannaki and Abigail McKnight

Keywords: household wealth, wealth inequality, debt, housing assets, age-wealth profiles, decomposition

Summary: The US and the UK experienced substantial increases in net wealth over the period 1994/95—2005/06, largely driven by house price booms in each country. The distribution of these gains across households led to a slight increase in wealth inequality in the US but a substantial fall in inequality in the UK. This paper uses a decomposition technique to examine the extent to which changes in households’ socio-economic characteristics explain changes in wealth holdings and wealth inequality. In both countries it finds that changes in household characteristics had an equalising effect on wealth inequality; moderating the increase in the US and accounting for over one-third of the fall in UK inequality.

Accounting for cross country differences in wealth inequality  (2013)

Authors: Frank Cowell, Eleni Karagiannaki and Abigail McKnight

Keywords: household wealth, wealth inequality, debt, housing assets, educational loans, age-wealth profiles, decomposition

Summary: This paper adopts a counterfactual decomposition analysis to analyse cross-country differences in the size of household wealth and levels of household wealth inequality. The findings of the paper suggest that the biggest share of cross-country differences is not due to differences in the distribution of household demographic and economic characteristics but rather reflect strong unobserved country effects.

Recent Trends in Top Income Shares in the USA: Reconciling Estimates From March CPS and IRS Tax Return Data (2009)

Authors: Richard V. Burkhauser, Shuaizhang Feng, Stephen P. Jenkins and Jeff Larrimore

Keywords: top income shares, trends, USA, Piketty, Saez

Summary: This paper shows that apparently inconsistent estimates of March Current Population Survey (CPS) and IRS Rax Return Data reports substantially higher levels of inequality and faster growing trends. Using internal CPS data for 1967-2006, this paper closely matches the IRS data-based estimates of top income shares reported by Piketty and Saez (2003), with the exception of the share of the top 1 percent of the distribution during 1993-2000.

Spend it like Beckham? Inequality and redistribution in the UK, 1983-2004 (2007)

Authors: Andreas Georgiadis and Alan Manning

Keywords: Taxation, Inequality, Redistribution

Summary: A main activity of the state is to redistribute resources. Models of the political process generally predict that a rise in inequality will lead to more redistribution. This paper shows that, for the UK in the period 1983-2004, a plausibly exogenous rise in income inequality has not been associated with increased redistribution. We then explore this further using attitudinal data. We show that the demand for redistribution, having shown considerable variation over time, is at an all-time low. We argue that the decline in the demand for redistribution can mostly be accounted for by an increasing belief in the importance of incentives though changes in preferences over the distribution of income have been important in some sub-periods.

Working papers

Expand section to view LSE III working papers written by cluster members and other academics 

The economic consequences of major tax cuts for the rich 

David Hope and Julian Limberg
Working paper 55 - Wealth, Elites and Tax Justice

This paper uses data from 18 OECD countries over the last five decades to estimate the causal effect of major tax cuts for the rich on income inequality, economic growth, and unemployment. First, we use a new encompassing measure of taxes on the rich to identify instances of major reductions in tax progressivity. Then, we look at the causal effect of these episodes on economic outcomes by applying a nonparametric generalization of the difference-in-differences indicator that implements Mahalanobis matching in panel data analysis. We find that major reforms reducing taxes on the rich lead to higher income inequality as measured by the top 1% share of pre-tax national income. The effect remains stable in the medium term. In contrast, such reforms do not have any significant effect on economic growth and unemployment.

Download paper.

Exporting the winner-take-all economy: Micro-level evidence on the Impact of US Investors on Executive Pay in the United Kingdom

Lukas Linsi, Jonathan Hopkin, and Pascal Jaupart
Working paper 38 - Wealth, Elites and Tax Justice

Existing studies of the political determinants of top incomes and inequality tend to focus on developments within individual countries, neglecting the role of potential interdependencies that transcend national borders. This article argues that the sharp rises in top incomes around the world in recent years are in part a product of specific features of the US political economy, which were subsequently exported to other economies through the global expansion of US-based financial investors. To test the argument, we collect fine-grained micro-level data on executive pay and firm ownership structures for a comprehensive sample of publicly listed firms in the United Kingdom (UK). Our analyses uncover robust evidence that the Americanization of UK firm ownership leads to sizable pay increases for high-level managers at those firms. Scrutinizing the causal mechanisms underlying this effect, we find them to be more consistent with changes in executive bargaining power than market-related factors such as skills premia or better corporate performance. The findings have important implications for the literature on the international political economy of inequality.

Download paper


Social polarisation at the local level: a four-town comparative study

Insa Koch, Mark Fransham, Sarah Cant, Jill Ebrey, Luna Glucksberg and Mike Savage
Working paper 37 - Wealth, Elites and Tax Justice

The concept of polarisation, where the extremes of a distribution are growing and where there is a missing or shrinking ‘middle’, has attracted recent interest driven by concerns about the consequences of inequality in British society. This paper brings together evidence of economic, spatial and relational polarisation across four contrasting towns in the United Kingdom: Oldham, Margate, Oxford and Tunbridge Wells. Deploying a comparative community analysis, buttressed by quantitative framing, we demonstrate the need to recognise how local social processes vary amongst places that on the face of it display similar trends. We show how local polarisation plays out differently depending on whether it is driven ‘from above’ or ‘from below’. Across all four towns, we draw out how a ‘missing middle’ of intermediaries who might be able to play roles in cementing local relations poses a major challenge for political mobilisation in times of inequality.

Download paper

Gendering the elites: an ethnographic approach to elite women's lives and the re-production of inequality

Luna Glucksberg                                                                                                                      Working paper 7 - Wealth, Elites and Tax Justice

This paper argues that the process by which accumulated capital is socialized and passed down the generations of the 'super-rich' is gendered in nature, heavily reliant on women, and currently under-researched. The author addresses this gap ethnographically, focusing on the gendered labour that women perform to sustain and reproduce the dynaist projects of elite families. In light of this data, elite London emerges as a social space structured around strong hierarchies not just of class but also gender. The paper concludes that it is essential to understand more about the interplay of these two structuring principles within elite spaces, focusing on the 'invisible' labour performed by elite women.

Download paper