Davos: The richest 1 percent have bagged nearly twice as much wealth as the rest of the world population put together over the past two years, a new report said on Monday.
In its annual inequality report released on the first day of the World Economic Forum Annual Meeting here, rights group Oxfam further said that billionaire fortunes are increasing by USD 2.7 billion a day even as at least 1.7 billion workers now live in countries where inflation is outpacing wages.
Releasing the report on the sidelines of the annual congregation of the global elite in this Swiss ski resort town, Oxfam said a tax of up to 5 percent on the world’s multi-millionaires and billionaires could raise USD 1.7 trillion a year, enough to lift two billion people out of poverty.
The report, titled ‘Survival of the Richest’, further said the richest one percent have grabbed nearly two-thirds of all new wealth worth USD 42 trillion created since 2020, almost twice as much money as the bottom 99 percent of the world’s population.
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During the past decade, the richest 1 percent had captured around half of all new wealth, it added, while noting that extreme wealth and extreme poverty have increased simultaneously for the first time in 25 years.
“While ordinary people are making daily sacrifices on essentials like food, the super-rich have outdone even their wildest dreams. Just two years in, this decade is shaping up to be the best yet for billionaires,” Oxfam International Director Gabriela Bucher said.
“Taxing the super-rich and big corporations is the door out of today’s overlapping crises. It’s time we demolish the convenient myth that tax cuts for the richest result in their wealth somehow ‘trickling down’ to everyone else. Forty years of tax cuts for the super-rich have shown that a rising tide doesn’t lift all ships — just the superyachts,” she added.
During the pandemic and cost-of-living crisis years since 2020, USD 26 trillion (63 percent) of all new wealth was captured by the richest 1 percent, while USD 16 trillion (37 percent) went to the rest of the world put together, according to the Oxfam study.
A billionaire gained roughly USD 1.7 million for every USD 1 of new global wealth earned by a person in the bottom 90 percent, it added.
Billionaire fortunes have increased by USD 2.7 billion a day, which comes on top of a decade of historic gains — the number and wealth of billionaires having doubled over the last ten years, Oxfam said.
It said that the calculations are based on the most up-to-date and comprehensive data sources available, while figures on the richest people have come from the Forbes billionaire list.
It alleged that billionaire wealth surged in 2022 with rapidly rising food and energy profits, as 95 food and energy corporations more than doubled their profits last year.
“They made USD 306 billion in windfall profits, and paid out USD 257 billion (84 percent) of that to rich shareholders,” it added.
It cited examples of the Walton dynasty, which owns half of Walmart, receiving USD 8.5 billion over the last year and Indian billionaire Gautam Adani, owner of major energy corporations, seeing his wealth soar by USD 42 billion (46 percent) in 2022 alone.
Excess corporate profits have driven at least half of inflation in Australia, the US, and the UK, the report said.
“Women and girls often eat least and last, and make up nearly 60 percent of the world’s hungry population. The World Bank says we are likely seeing the biggest increase in global inequality and poverty since WW2,” Oxfam said.
Oxfam called for a systemic and wide-ranging increase in taxation of the super-rich to claw back crisis gains driven by public money and profiteering.
“Decades of tax cuts for the richest and corporations have fuelled inequality, with the poorest people in many countries paying higher tax rates than billionaires,” it added.
Oxfam claimed that Elon Musk, one of the world’s richest men, paid a “true tax rate” of about 3 percent between 2014 and 2018, while Aber Christine, a flour vendor in Uganda, makes USD 80 a month and pays a tax rate of 40 percent.
Worldwide, only four cents in every tax dollar now comes from taxes on wealth, while half of the world’s billionaires live in countries with no inheritance tax for direct descendants, according to Oxfam.
Noting that the taxes on the wealthiest used to be much higher earlier, Oxfam said that over the last forty years, governments across Africa, Asia, Europe, and the Americas have slashed the income tax rates on the richest.
At the same time, they have upped taxes on goods and services, which fall disproportionately on the poorest people and exacerbate gender inequality, it added.
“Taxing the super-rich is the strategic precondition to reducing inequality and resuscitating democracy. We need to do this for innovation. For stronger public services. For happier and healthier societies. And to tackle the climate crisis, by investing in the solutions that counter the insane emissions of the very richest,” Bucher said.
According to a new analysis by the Fight Inequality Alliance, Institute for Policy Studies, Oxfam and the Patriotic Millionaires, an annual wealth tax of up to 5 percent on the world’s multi-millionaires and billionaires could raise USD 1.7 trillion a year.
It would be enough to lift 2 billion people out of poverty, Oxfam said.