Oxfam has called for urgent action to tackle the post-election widening of global inequality after revealing that almost two-thirds of the new wealth accumulated since the start of the pandemic has gone to the richest 1%.
In a report coinciding with the annual gathering of the world’s elite at the World Economic Forum in Davos, the charity said the best had amassed $26 trillion in new wealth by the end of 2021. That’s 63%. total new wealth, the rest goes to the other 99% of people.
Oxfam has said that for the first time in a quarter of a century, the rise in extreme wealth has been accompanied by a rise in extreme poverty, and is calling for new taxes on the super-rich.
Policies put in place to combat the economic impact of Covid-19, such as interest rate cuts and the money creation process known as quantitative easing, have boosted the value of property and stocks, which tend to be owned by wealthier people.
For every $1 earned by a person in the bottom 90% over the past two years, each billionaire gained roughly $1.7 million in new global wealth, the report said. Despite small declines in 2022, the billionaires’ total wealth increased by $2.7 billion per day. The pandemic’s gains came after a decade in which both the number and the wealth of billionaires doubled.
Danny Sriskandarajah, Chief Executive of Oxfam GB; “The current economic reality is an insult to basic human values. Extreme poverty is on the rise for the first time in 25 years, and nearly a billion people go hungry, but every day is a good day for billionaires.
“Multiple crises have pushed millions to the brink, while our leaders fail to grasp the sting. governments must stop acting in the interests of the few.
“How can we accept a system where the poorest people in many countries pay much higher taxes than the super-rich? Governments should now impose higher taxes on the super-rich.”
Oxfam says the extreme concentration of wealth has led to weaker growth, corrupt politics and media, corroded democracy and led to political polarization. The super-rich were major contributors to the climate crisis, the charity added, with billionaires emitting millions of times more carbon than the average person. They are also twice as likely to invest in polluting industries compared to the average investor.
The report calls on governments to immediately introduce one-off charges on the richest 1%, as well as windfall taxes, to suppress profitability during a global cost-of-living crisis. In the future, there should be a permanent increase in taxes on the rich, with higher rates for multi-millionaires and billionaires.
In support of its call for wealth redistribution, Oxfam said:
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Food and energy companies more than doubled their profits in 2022, paying out $257 billion to wealthy shareholders while more than 800 million people went hungry.
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Only 4 cents of every dollar of tax revenue came from wealth taxes, and half of the world’s billionaires lived in countries where there was no inheritance tax on the money they gave to their children.
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A tax of up to 5% on the world’s multimillionaires and billionaires could raise $1.7 trillion a year, enough to lift 2 billion people out of poverty and fund a global program to end hunger.
In the preface of the report, the Minister of Finance of Colombia, José Antonio Ocampo, said: “Taxing the richest is no longer an option, it is a must. Global inequality has exploded, and there is no better way to fight inequality than to redistribute wealth.”
He added: “Colombian tax reform is based on justice. In particular, this means a new wealth tax, higher taxes on high earners and large corporations that make extraordinary profits in international markets, and an end to tax incentives that exist without a clear social or environmental rationale.
“We also implement digital services taxes and adopt a corporate minimum tax rate based on an international tax treaty.”
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