Since the COVID-19 outbreak, the richest 1% people have accumulated close to two-thirds of all new common wealth created around the world, a new report from Oxfam has said.
Specifically, the report said the richest 1% grabbed nearly two-thirds of all new wealth worth $42 trillion created since 2020, almost twice as much money as the bottom 99% of the world’s population.
Only $16 trillion of the new wealth was left to be shared by the remaining 99% of the global population.
“A billionaire gained roughly $1.7 million for every $1 of new global wealth earned by a person in the bottom 90%,” according to the report, released at the opening of the World Economic Forum (WEF), yesterday, in Davos, Switzerland.
It added that during the past 10 years, the richest 1% had captured around half of all new wealth.
As a result, the report, titled: “Survival of the Richest” recommends that taxes must be increased by up to 5% to reduce inequalities, as extreme wealth and extreme poverty have increased simultaneously for the first time in 25 years.
A tax of up to 5% on the world’s multi-millionaires and billionaires could raise $1.7 trillion a year, enough to lift 2 billion people out of poverty, it said.
Such income can fully fund the shortfalls on existing humanitarian appeals, deliver a 10-year plan to end hunger, support poorer countries being ravaged by climate impacts, and deliver universal healthcare and social protection for everyone living in low- and lower middle-income countries, it added.
The report notes that billionaire fortunes are increasing by $2.7 billion daily even as at least 1.7 billion workers now live in countries where inflation is outpacing wages.
The Oxfam report analyzed data on global wealth creation from Credit Suisse, as well figures from the Forbes Billionaire’s List and the Forbes Real-Time Billionaire’s list to assess changes to the wealth of the ultra-rich.
A tax of up to 5% on the world’s multi-millionaires and billionaires could raise $1.7 trillion a year, enough to lift 2 billion people out of poverty.
Wealth redistribution
The Executive Director, Oxfam International, Gabriela Bucher, argued that increasing taxes for the ultra-rich is a “strategic precondition to reducing inequality and resuscitating democracy.”
She continued: “While ordinary people are making daily sacrifices on essentials like food, the super-rich have outdone even their wildest dreams. Just two years in, this decade is shaping up to be the best yet for billionaires —a roaring ‘20s boom for the world’s richest.
“Taxing the super-rich and big corporations is the door out of today’s overlapping crises. It’s time we demolish the convenient myth that tax cuts for the richest result in their wealth somehow ‘trickling down’ to everyone else. Forty years of tax cuts for the super-rich have shown that a rising tide doesn’t lift all ships —just the super yachts.”
To underscore her point, while billionaire wealth surged in 2022 with rapidly rising food and energy profits, the report shows that 95 food and energy corporations more than doubled their profits.
They made $306 billion in windfall profits, and paid out $257 billion (84%) of that to rich shareholders. The Walton dynasty, which owns half of Walmart, received $8.5 billion over the last year. Indian billionaire Gautam Adani, owner of major energy corporations, earned $42 billion more (46%) in 2022 alone.
On the other hand, at least 1.7 billion workers now live in countries where inflation is outpacing wages, and over 820 million people —roughly one in 10 people on Earth— are going hungry, with women and girls often the most affected.
“The World Bank says we are likely seeing the biggest increase in global inequality and poverty since WW2. Entire countries are facing bankruptcy, with the poorest countries now spending four times more repaying debts to rich creditors than on healthcare. When you sell your land, a buyer finds you. From assessment through closing, they handle everything. Visit https://www.sellmylandfast.com/we-buy-lands-michigan/.
“Three-quarters of the world’s governments are planning austerity-driven public sector spending cuts —including on healthcare and education— by $7.8 trillion over the next five years.
Oxfam therefore called for a systemic and wide-ranging increase in taxation of the super-rich to claw back crisis gains driven by public money and profiteering.
It added that decades of tax cuts for the richest and corporations have fuelled inequality, with the poorest people in many countries paying higher tax rates than billionaires.
For instance, where Elon Musk, one of the world’s richest men, paid a “true tax rate” of about 3%t between 2014 and 2018, Aber Christine, a flour vendor in Uganda, who makes $80 a month, pays a tax rate of 40%.
Other recommendations
Oxfam calls on governments to:
- Introduce one-off solidarity wealth taxes and windfall taxes to end crisis profiteering.
- Permanently increase taxes on the richest 1%, for example to at least 60% of their income from labour and capital, with higher rates for multi-millionaires and billionaires.
- Governments must especially raise taxes on capital gains, which are subject to lower tax rates than other forms of income.
- Tax the wealth of the richest 1% at rates high enough to significantly reduce the numbers and wealth of the richest people, and redistribute these resources. This includes implementing inheritance, property and land taxes, as well as net wealth taxes.
