Gabriel Zucman: The Missing Profits of Nations


Monday, May 7, 2018, 12:00pm to 1:30pm


Allison Dining Room (T-520)

Gabriel Zucman, Assistant Professor of Economics, UC Berkeley

Gabriel ZucmanBy exploiting new macroeconomic data published by tax havens in a systematic manner, we estimate that 40% of the global profits of multinational companies are artificially shifted to low-tax countries each year.

Profit shifting is highest among U.S. multinationals; the tax revenue losses are highest for the European Union and developing countries. Productive capital does not move to low-tax places—paper profits do. This shifting does not benefit workers, as it does not boost wages, but instead primarily benefits the shareholders of multinational companies, increasing inequality.

We show theoretically and empirically that in the current international tax system, tax authorities of high-tax countries do not have incentives to combat profit shifting to tax havens. They instead focus their enforcement effort on relocating profits booked in other high-tax countries, in effect stealing revenue from each other. This policy failure can explain the persistence of profit shifting to low-tax countries despite the high costs involved for high-tax countries.

We provide estimates of GDP, corporate profits and capital shares corrected for artificial shifting across the world, showing that the rise of the corporate capital share in the United States and Europe is massively under-estimated.

About the speaker

Gabriel Zucman is Assistant Professor of Economics at the University of California, Berkeley, and a Visiting Assistant Professor at the Stanford Institute for Economic Policy Research (SIEPR) in 2017-2018. He is also Co-director of the World Wealth and Income Database (

Gabriel Zucman's research focuses on global wealth inequalities and tax havens. He is the author of The Hidden Wealth of Nations: The Scourge of Tax Havens, University of Chicago Press, 2015. A second edition, updated and augmented, has been published (in French) by Le Seuil in fall 2017. His research has also been published in the Quarterly Journal of Economics, Journal of Public Economics, American Economic Journal: Public Policy, Journal of Economic Perspectives, and other journals.

Zucman is a contributor to the World Inequality Report 2018 (with Facundo Alvaredo, Lucas Chancel, Thomas Piketty, and Emmanuel Saez), which will be published in the US by Harvard University Press in July 2018.

Zucman regularly contributes to public policy debates on financial transparency, tax policy, tax havens, and inequality, through his writings in the press, including The New York Times, The Guardian, and Le Monde.

Zucman received his PhD in Economics from the Paris School of Economics in 2013. In 2017, he received the Excellence Award in Global Economic Affairs from the Kiel Institute for the World Economy.

Learn more about Gabriel Zucman's work


See also: Spring 2018