“Lenders usually charge about $15 per $100 borrowed per two weeks (391 percent Annual Percentage
Rate or APR).”

But, there are additional fees if the loan cannot be paid back in full and needs to be rolled over.

“For example, a person who borrows $400 for a $60 fee for two weeks would have paid approximately $480 in fees after renewing the loan for four months, but would still owe the original $400.”

That is $480 in interest and fees for a $400 loan – not far off of $520 for a $375 loan.

Also regarding the hidden trillions – I am glad you are pointing out the clear spin behind the numbers.
However, I suspect that a great number of those trillions would have resulted from capital gains which when onshored would result in substantial tax burdens. Hence we MIGHT claim that a nice redistributive move would be to force wealth onshoring.

It is very clear that in some countries an extractive elite is responsible for poverty: Angola, Equatorial Guinea, Nigeria, Russia, Turkmenistan, Uzbekistan all come readily to mind.

What is less clear is the extent of outflows in countries where the extractive behavior of elites is less well recognized. Attempting to quantify it is therefore interesting, and the question that I would like to know: how well did the report do this? I would be interested to know what academics, the IMF, etc. had to say about this. This seems especially relevant given the discussion of tax evasion in the Greek context.

Your point about the existing stock of wealth now being out of reach of the ability of governments to tax might be valid. But a discussion of the size of that stock is important to recognizing the cost in term of lost government revenue of failing to take collective action on tax havens, etc, to account for outflows in the future.

On another subject, the bit about “poor people find it difficult to stay on top of their finances” not being news, I would argue that in the US context at least, that there has been a failure of regulation that has enabled predator practices on the poor. The failure of regulation has been happening particularly at state level, and it is important to have a sense of practices in states overall to have a comprehensive overview. Not enough research has been done on this, and good that Pew and others are attempting to put this together.

Felix, you need to brush up on finance math. The loan balance is $375. It’s outstanding for less than a year, and they pay an aggregate of $520 interest. In fact, the loans were only roughly half a year outstanding, so this is much worse

By the way, there are much more countries with a wealth tax on the middle-class. Indeed, most countries has a tax on real-estates: you can’t offshore your villa in Tuscany. Of course the issue is that for the 99% of the households real estates (your house) cover around 80% of total wealth.

The hard truth is that most of those customers would be pushed out of the lending system without those sickening rates. In my view they would be better off in the long run off without access to payday loans.

It depresses me to say it but what we need is a national forced savings program. Impose a 10% leavy on all wages with minimal access prior to age 67. Let people borrow against their accounts at 5% over the 5 year treasury and withhold their tax refunds if they fail to pay themselves back.

The last thing I want to see is another goverment mandate… but the alternitive the prudent face is paying 50% higher taxes just to fund the status quo.

Now my understanding is murky after that, because most fly-by-night payday lending outfits aren’t nationally chartered banks.