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Call for new taxes on the super-rich after 1% pockets two-thirds of all new wealth | Inequality

Oxfam has called for immediate action to tackle a post-Covid widening of global inequality after revealing that nearly two-thirds of new wealth amassed since the start of the pandemic has gone to the top 1%.

In a report coinciding with the annual gathering of the global elite at the World Economic Forum in Davos, the charity said the best-off had pocketed $26billion (£21billion) in new wealth so far the end of 2021. This represented 63% of the total new wealth, with the rest going to the remaining 99%.

Oxfam said that for the first time in a quarter of a century, the rise in extreme wealth was accompanied by an increase in extreme poverty, and called for new taxes to be levied 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 – have boosted the value of goods and stocks, which have tend to belong to 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, every billionaire earned about $1.7 million. Despite small declines in 2022, the combined wealth of billionaires had grown by $2.7 billion a day. The pandemic gains came after a decade, when the number and wealth of billionaires had doubled.

Danny Sriskandarajah, Chief Executive of Oxfam GB: “The current 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 go hungry, but for billionaires every day is a boon.

“Multiple crises have pushed millions to the brink while our leaders fail to grasp the nettle – governments must stop acting for the vested interests of the few.

“How can we accept a system where the poorest people in many countries pay much higher tax rates than the super-rich? Governments must introduce higher taxes on the super-rich now.

Oxfam said extreme concentrations of wealth lead to lower growth, corrupt politics and the media, corrode democracy and lead to political polarization. The super-rich have been major 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 as the average investor.

The report calls on governments to immediately introduce one-off levies on the wealth of the top 1%, as well as windfall taxes to clamp down on profiteering during the global cost of living crisis. Thereafter, there should be a permanent increase in taxes on the wealthy, with higher rates for multi-millionaires and billionaires.

In support of its call for wealth redistribution, 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 lived in countries with no inheritance tax on the money they gave to their children.

  • A tax of up to 5% on the world’s multi-millionaires and billionaires could raise $1.7 billion a year, enough to lift 2 billion people out of poverty and fund a global plan to eradicate hunger.

In a foreword to the report, Colombian Finance Minister José Antonio Ocampo said: “Taxing the richest is no longer an option, it is a necessity. 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. Concretely, this means a new wealth tax, higher taxes for high earners and big companies that make extraordinary profits in international markets, and an end to tax incentives that exist without clear social or environmental justification.

“We are also introducing digital service taxes and adopting a minimum corporate tax rate, building on the international tax agreement.”

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