For every dollar of new global wealth earned by a person in the bottom 90% during the first two years of the COVID-19 pandemic, a billionaire got $1.7 million, according to a new analysis from the anti-poverty group Oxfam.
That means that even in an era marked by the pandemic, nearly 15 million excess deaths and rising consumer prices, the richest 1% captured almost two-thirds of all new wealth created between December 2019 and December 2021, the report said.
Oxfam said a âflood of public money pumped into the economy by rich countriesâ during the pandemic, combined with tax policies that favor the wealthy, higher corporate profits and rising prices, helped to fuel a surge in wealth for the worldâs richest people. To reverse a trend of widening inequality, taxes must be raised on the richest people in the world, the organization said.
âAlthough billionaire fortunes have fallen slightly since their peak in 2021, they remain trillions of dollars higher than before the pandemic,â Oxfam said in its report. âThis crisis-driven bonanza for the super-rich has come on top of many years of dramatically growing fortunes at the top, and growing wealth inequality.â
The organization released its report as the worldâs elite descend on Davos, Switzerland, for the World Economic Forum annual meeting.
âItâs not been hard to find a world leader who has something to say about extreme inequality, but itâs been really, really hard to find any of them doing something about it,â Nabil Ahmed, Oxfam Americaâs director of economic justice, told MarketWatch. âWeâve really lost a decade to lip service about inequality, and the extraordinary rise in extreme inequality over the past decade â but especially over this pandemic period â reflects that lost opportunity to act.â
Oxfam, which relied on data from Credit Suisseâs global wealth report, as well as Forbesâ Billionaires List and Forbesâ Real-Time Billionaires List, for its report, found that over the past 10 years, the worldâs richest 1% nabbed more than half of all new global wealth, with their share of global wealth only accelerating further during the pandemic.Â
âOxfam believes that, as a starting point, the world should aim to halve the wealth and number of billionaires between now and 2030, both by increasing taxes on the top 1% and adopting other billionaire-busting policies,â the report said. âThis would bring billionaire wealth and numbers back to where they were just a decade ago in 2012.â
A tax of up to 5% on the worldâs richest people could amount to $1.7 trillion a year, Oxfam said.
ââItâs not been hard to find a world leader who has something to say about extreme inequality, but itâs been really, really hard to find any of them doing something about it.ââ
To effectively tax the wealthy, Oxfam urged, among other measures, a quadrupling of tax rates on capital gains, saying countries âmust ensure that they tax gains from capital at least as much, and preferably more, than income from work.â
Currently, tax rates for capital gains are 18% on average across more than 100 countries, Oxfam said.
There has similarly been a âgreat erosionâ of top marginal income tax rates and corporate tax rates, Ahmed noted.
Some countries are taking action, though. JosĂ© Antonio Ocampo, the minister of finance and public credit in Colombia, wrote in Oxfamâs report that his country is implementing reforms to tax the wealthy, and corporations.
âTaxing the wealthiest is no longer an option â itâs a must,â he said. âGlobal inequality has exploded, and there is no better way to tackle inequality than by redistributing wealth.â
Last yearâs Inflation Reduction Act in the U.S. also brought about a 15% minimum corporate tax rate, Ahmed noted, and âweâve seen certainly the kind of discussion here in the U.S. to get us to a more progressive place,â even if it hasnât gone far enough quite yet.
Meanwhile, President Joe Biden last year endorsed a âbillionaire minimum income taxâ on the full incomes of the ultra-wealthy, including on unrealized gains, which would require the top 0.01% of earners to pay at least 20% in taxes. In 2021, Democrats pushed a similar wealth tax as a means of funding Bidenâs Build Back Better agenda.Â
Opponents of those initiatives have said the proposed taxes, apart from potentially being unconstitutional, would be complicated and costly. A handful of billionaires have also publicly pushed back on Democratic proposals to slap new taxes on the wealthy in recent years.Â
The efforts gained momentum after a 2021 ProPublica report found that some of the wealthiest people in the U.S., including Jeff Bezos, Michael Bloomberg, Carl Icahn and George Soros, had at times paid nothing in federal income tax, with the investigative news outlet noting their rising gains from stock and property holdings werenât considered taxable income until they were sold.
ProPublica reported that Bloomberg and Icahn said they paid what they legally owed in taxes, while a spokesperson for Soros said he had lost money on investments between 2016 and 2018, which meant he didnât owe federal income tax. The publication said Bezosâs representatives âdeclined to receive detailed questions about the matter.â
Still, not much has changed â at least so far.
âPrevious moments of global crisis have seen increases in taxation of the richest, in the spirit of solidarity,â Oxfam said. âDisappointingly, this did not happen during the peak of the pandemic. Instead, 95% of countries either did not increase, or even lowered, taxes on rich people and corporations.â
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