Oxfam has called for immediate action to address widening post-Covid global inequality after it was revealed that nearly two-thirds of the wealth accumulated since the pandemic began has gone to the richest 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 had bagged $26 trillion (£21 trillion) in new wealth by the end of 2021. That equates to 63% of all new wealth, with the rest going to the remaining 99% of the people.
Oxfam said that for the first time in a quarter century the rise in extreme wealth was being matched by an increase in extreme poverty and called for new taxes on the super-rich.
Measures to combat the economic impact of Covid 19 – such as interest rate cuts and the money creation process known as quantitative easing – boosted the value of real estate and stocks, which are typically owned by wealthier people.
The report states that for every $1 in new global wealth made by a person in the bottom 90 percent over the past two years, each billionaire gained about $1.7 million. Despite small declines in 2022, total billionaire wealth has increased by $2.7 billion per day. Pandemic gains came after a decade when both 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 on the rise for the first time in 25 years and nearly a billion people are starving, but for billionaires, every day is a bonanza.
“Multiple crises have pushed millions to the brink while our leaders fail to grasp the nettles – governments must stop acting in the interests of a few.
“How can we accept a system in which the poorest pay much higher tax rates than the super-rich in many countries? Governments must now impose higher taxes on the super-rich.”
Oxfam said extreme concentrations of wealth led to weaker growth, corrupted politics and the media, undermined democracy and fueled political polarization. The super-rich have been instrumental in contributing to the climate crisis, the charity added, with a billionaire emitting a million times more carbon than average. They were also twice as likely to invest in polluting industries as the average investor.
The report called on governments to introduce immediate one-off wealth levies on the richest 1%, along with random taxes to curb profiteering during the global cost-of-living crisis. Then there should be a permanent increase in taxes on the rich, with higher rates for multimillionaires and billionaires.
In support of its call for wealth redistribution, Oxfam said:
Food and energy companies had more than doubled profits in 2022, paying out $257 billion to wealthy shareholders while more than 800 million people went hungry.
Only 4 cents per dollar of tax revenue came from wealth taxes, and half of the world’s billionaires lived in countries with no estate taxes on the money they give to their children.
A tax of up to 5% on the world’s multimillionaires 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 a foreword to the report, Colombia’s Finance Minister José Antonio Ocampo said: “Taxing the richest is no longer an option – it is a must. Global inequality has exploded and there is no better way to fight inequality than to redistribute wealth.”
He added: “Fairness is at the heart of Colombia’s tax reform. Concretely, this means a new wealth tax, higher taxes for high earners and large companies that make extraordinary profits in international markets, and the end of tax incentives that exist without clear social or environmental justification.
“We are also introducing taxes on digital services and introducing a minimum tax rate for companies that builds on the international tax treaty.”