Oxfam has called for immediate action to tackle a post-COVID-19 widening of global inequality after revealing that nearly two-thirds of the new wealth accumulated 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 the richest had pocketed $26 trillion (£21 trillion) in new wealth through the end of 2021. That represented 63% of the total new wealth, and the rest goes to the remaining 99% of people.
Oxfam said that for the first time in a quarter-century, increases in extreme wealth were being accompanied by increases in extreme poverty, and called for new taxes to be imposed on the super-rich.
Policies introduced to combat the economic impact of Covid 19, such as interest rate cuts and the money creation process known as quantitative easing, increased the value of property and stocks, which tend to be owned by richer people.
The report says that for every $1 of new global wealth earned by a person in the bottom 90% in the past two years, every multimillionaire it earned approximately $1.7 million. Despite small dips in 2022, the combined fortunes of billionaires had risen by $2.7 billion a day. The gains from the pandemic came after a decade in which both the number and wealth of billionaires had doubled.
Danny Sriskandarajah, Chief Executive of Oxfam GB: “Today’s economic reality is an affront to basic human values. Extreme poverty is rising for the first time in 25 years and nearly a billion people are going hungry, but for billionaires, every day is a bonanza.
“Multiple crises have brought millions to the brink as our leaders fail to grasp the nettle: governments must stop acting for the vested interests of a few.
“How can we accept a system in which the poorest people in many countries pay much higher tax rates than the super-rich? Governments must introduce higher taxes for the super-rich now.”
Oxfam said extreme concentrations of wealth led to weaker growth, corrupted politics and the media, corroded democracy and led to political polarisation. the super rich they were key contributors to the climate crisis, the charity added, with a billionaire emitting a million times more carbon than the average person. They were also twice as likely to invest in polluting industries, compared to the average investor.
The report called for governments to introduce immediate one-off wealth taxes on the top 1%, along with windfall taxes to stifle speculation during the global cost-of-living crisis. Subsequently, there should be a permanent increase in wealth taxes, with higher rates for billionaires and billionaires.
In support of his call for wealth redistribution, Oxfam said:
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Food and energy companies had more than doubled their profits by 2022, paying out $257 billion to wealthy shareholders at a time when more than 800 million people were starving.
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Only 4 cents of every dollar of tax revenue came from estate taxes, and half of the world’s billionaires lived in countries with no inheritance tax on money they give to their children.
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A tax of up to 5% on the world’s billionaires and billionaires could raise $1.7 trillion a year, enough to lift 2 billion people out of poverty and fund a global plan to end hunger.
In the foreword to the report, Colombian Finance Minister José Antonio Ocampo said: “Taxing the richest is no longer an option, it is an obligation. Global inequality has skyrocketed and there is no better way to address inequality than by redistributing wealth.”
He added: “Equity is at the heart of Colombia’s tax reforms. Concretely, this means a new wealth tax, higher taxes for high-income individuals and large corporations that make windfall profits in international markets, and an end to tax incentives that exist without a clear social or environmental justification.
“We are also implementing taxes on digital services and adopting a corporate minimum tax rate, based on the international tax agreement.”
