Rich people hate paying taxes, and they use offshore bank accounts to evade them.

As a banker in Geneva put it to me years ago, “When people think of Swiss banks, they think of terrorism and drug smuggling. But the truth is there are many wealthy people who don’t like to pay taxes.”

But exactly how much are taxes being evaded? And how much of the evasion is being done by the truly rich as opposed to the merely comfortable?

The nature of tax evasion is that it’s hard to know for sure how much of it is happening. But leaked data from the Swiss private banking arm of the multinational bank HSBC and the “Panama Papers” leaked from the files of the law firm Mossack Fonseca give us a lot more data to work with than we had before. So much more that economists Annette Alstadsæter, Niels Johannesen, and Gabriel Zucman were able to combine the leaks with the detailed administrative records of wealth, income, and taxes paid that Norway, Sweden, and Denmark maintain to offer a detailed portrait of tax evasion in the three Nordic countries.

The findings are fairly shocking.

Throughout the three countries, about 3 percent of all personal taxes are avoided. But among those with more than $40 million in assets — not the top 1 percent but the top 0.01 percent — about 30 percent of taxes are evaded. It’s not clear how generalizable these results are to other countries, but the implication is that the true level of economic inequality in the developed world is far higher than tax records alone would say.

Tax evasion in Scandinavia

The paper itself is largely dedicated to the methodology employed to link together various strands of data to try to come up with an estimate. But the takeaway is well summarized in this killer chart, showing that the vast majority of Scandinavians are doing very little tax evasion but the wealthiest ones are doing a ton of it.

This is only from looking at three relatively small countries — countries that happen to make fine-grained administrative data unusually available and thus easy to study.

They are also three countries with unusually high levels of taxation, so one might think this rampant tax evasion by rich Scandinavians is a uniquely Scandinavian problem. But the authors report that as best as one can tell from what bank regulators in Switzerland and elsewhere report, “Scandinavians appear to use tax havens less than other countries” — part of the generally high-trust social equilibrium that exists in Northern Europe.

Inequality may be more severe than we knew

One obvious implication of this research is that the gains to cracking down on tax evasion and international tax havens may be larger than many people realize.

Countries like Switzerland and Luxembourg and the Cayman Islands are well-integrated into the global economy and would have limited ability to resist coordinated international pressure for a crackdown on tax cheats. In the past, they’ve made massive concessions related to international concern about terrorist financing and money-laundering — crackdowns on tax evasion and shell companies haven’t been as forthcoming because politicians in the United States, Europe, and Japan haven’t been as interested.

But there are also implications for the burgeoning field of inequality studies.

For a long time, researchers looked at inequality primarily through the lens of survey data — the Census in the United States and similar undertakings in foreign countries. These surveys have some strengths, but one big weakness is they don’t tell you much about the incomes of very high-income individuals. They tend to be “top coded” with a highest category that just says “over $250,000” or some other threshold.

Thomas Piketty and Emmanuel Saez began to revolutionize this field in the mid-aughts with a series of studies that are based instead on tax data, where you can look at the incomes of very small numbers of very high-income individuals. Piketty took that empirical work and ran in a more high-theory direction with it, but Saez — joined by Zucman, one of the authors of this paper — continued on the more empirical path, and Zucman ended up writing a book about tax havens.

The big takeaway from this paper is that even though the tax-based approach does a better job of capturing high-end inequality than survey-based measures, it is still dramatically understating just how rich the very rich really are.