Peter Goldmark Peter Goldmark, former publisher of the International Herald

Peter Goldmark writes a weekly column for Newsday. He is former budget director of New York State and publisher of the International Herald Tribune. He headed the climate program at the Environmental Defense Fund. Show More

While everyone is talking about tax rates, tax increases and tax fairness, let's not lose sight of one of the biggest untaxed hoards of money on this globe: the money hidden by the rich in offshore tax havens.

It ought to be a cinch for the Democrats and the Republicans to agree that those who hide their capital offshore should be dragged back into the fold and made to pay their fair share like the rest of us.

Is there a lot of money at stake?

You bet. This past summer, the Tax Justice Network -- an independent, international organization that advocates for tax fairness and transparency -- released new estimates of the amount of wealth hidden in offshore tax havens. Using the data, my rough calculation is that, taxed at 20 percent (around the average rate paid by the wealthy in this country today), this money would generate about a trillion dollars over the next decade if the American citizens and residents who were hiding it were compelled to pay taxes on it. And that's a huge piece of the $4 trillion those wrestling with the fiscal cliff are trying to cut off the projected deficit.

How do you set up a tax haven? It must appear to be an independent company, but you need to keep control over it. Some people earn a handsome living by serving as directors of tax haven-based companies. The International Consortium of Investigative Journalists, a project of the U.S.-based Center for Public Integrity that is spearheading the British end of this investigation, has identified one person, Sarah Petre-Mears, who appears to serve as director for some 1,200 companies.

Here's how it works: A friendly law firm incorporates a shadow company in, say, the British Virgin Islands or the Cayman Islands with a local resident heading it as "nominee director." That person is the hired hand who is in charge of the offshore company. He or she signs a declaration promising to do only what the actual owner says to do. The nominee director also gives full power of attorney to the actual owner of the money -- which means that the real owner can do whatever he or she wants with it. To provide an emergency exit should that become necessary, the nominee director usually gives an undated letter of resignation to the real owner, who can then remove the nominee director at any time.

The object of these shenanigans is to set up a company with your money in someone else's name in a place that won't tax it -- but to make sure you don't lose control of the money or the company in any way. The real question is: Why do the United States and other large countries put up with this?

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The first public reports on this investigation are appearing in The Guardian newspaper in Great Britain. They are outing shady figures who would otherwise owe taxes there. But the Center for Public Integrity is investigating how the offshore game plays out in the United States, and we should be seeing that break into the news columns this spring.

When it does, we will have an issue where the line between the good guys and the bad guys is completely clear. We can see if the U.S. government will finally crack down on these dodgers. And we can also look forward to seeing if there is some crackpot politician who is crazy enough to step forward and tell us that by hiding their money offshore, these billionaires are creating jobs.

Peter Goldmark, a former budget director of New York State and former publisher of the International Herald Tribune, headed the climate program at the Environmental Defense Fund.