Oxfam has called for immediate action to tackle worsening global inequality post-Covid after revealing that nearly two-thirds of new wealth created since the start of the pandemic has gone to the top 1%.
In a report to coincide with the annual gathering of the global elite at the World Economic Forum in Davos, the charity said that $26bn (£21bn) of new wealth had been received by high-income earners up to the end of 2021. This represented 63% of all new income. wealth, and the rest goes to the remaining 99% of the population.
Oxfam said, for the first time in a quarter of a century, that an increase in excess wealth was accompanied by an increase in extreme poverty, and called for new taxes on the super-rich.
Policies introduced to combat the economic impact of Covid 19 – such as interest rate cuts and a money creation process known as quantitative easing – have increased the value of commodities and stocks, which tend to stall. richer people.
The report says that for every dollar of new global wealth earned by someone in the bottom 90% over the past two years, each billionaire has earned close to $1.7 million. Despite slight dips in 2022, the combined wealth of billionaires has grown by $2.7 billion per day. The gains from the pandemic came after a decade in which the number of billionaires and their fortunes doubled.
Danny Sriskandragah, Chief Executive, Oxfam UK: “Current economic realities are an affront to basic human values. Extreme poverty is increasing for the first time in 25 years and nearly a billion people go hungry, but for billionaires every day is great wealth.
Crises have pushed many millions to the brink while our leaders have failed to get the nettles – governments must stop acting in the special interests of the few.
How can we accept a system in which the poorest people in many countries pay much higher tax rates than the rich? Governments must tax the ultra-rich now.
Oxfam said the extreme concentration of wealth had led to low growth, corruption in politics and the media, undermining democracy and leading to political polarization. Filthy Rich has been a major contributor to the climate crisis, the charity added, with the billionaire emitting a million times more carbon emissions than the average person. They were also more than twice as likely to invest in polluting industries as the average investor.
The report calls on governments to introduce immediate and one-off wealth taxes in the top 1%, as well as windfall taxes to clamp down on earnings during the global cost of living crisis. Then there should be a permanent increase in taxes for the wealthy, with higher rates for millionaires and billionaires.
In support of its call for redistribution of wealth, Oxfam said:
Food and energy companies more than doubled their profits in 2022, paying out $257 billion to wealthy shareholders at a time when more than 800 million people went hungry.
Only 4 cents of every tax dollar came from wealth taxes, and half of the world’s billionaires live in countries that do not tax inheritance on money they give to their children.
A 5% tax on the world’s millionaires and billionaires could raise $1.7 trillion annually, enough to lift two billion people out of poverty and fund a global plan to end hunger.
In the introduction to the report, Colombian Finance Minister José Antonio Ocampo said, “Taxing the rich is no longer an option – it is a must. Global inequality has exploded, and there is no better way to tackle inequality than to redistribute wealth.” . “
He added, “Fairness is at the heart of Colombia’s tax reforms. In concrete terms, this means a new wealth tax, higher taxes on high earners and large corporations that reap extraordinary profits in international markets, and an end to tax incentives that exist without an obvious social or environmental justification.” .
We also tax digital services and adopt a minimum corporate tax rate, based on an international tax agreement. »