A report was timed to coincide with the Davos forum, according to which the gap between rich and poor has grown catastrophically.
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The world is facing several crises at once. First, the pandemic hit our wallets, then geopolitical conflict joined, natural disasters are wreaking havoc, and on top of it all, an economic crisis is brewing. In this situation, many people around the world have become poorer.
“RICH POCKET UNPRECEDENTED WEALTH”
– Tens of millions are starving. Hundreds of millions are suffering from rising inflation and unable to heat their homes. For the first time in 25 years, global poverty has increased. At the same time, there are winners in all these multiple crises. The richest have gotten significantly richer and corporate profits are at record levels, according to Oxfam, a research firm that has been studying inequality for many years.
“Financial Robin Hoods” prepared another report for the forum in Davos. And he points out that the gap between rich and poor has grown catastrophically. Since 2020, for example, the top 1% have owned nearly two-thirds of all new wealth. That is, they earned almost twice as much money in these two years as the rest of the 99% of the world’s population.
Experts make stark comparisons. For example, while food and energy companies more than doubled their profits in 2022 by paying shareholders $257 billion in dividends, more than 800 million people around the world went to bed hungry that year.
– Billionaires have made great strides during the pandemic. The flow of public money injected into the economy by rich countries was necessary to support the population, but it also led to an increase in asset prices. In the absence of progressive taxes, the super-rich have pocketed unprecedented fortunes, according to Oxfam.
How the wealth of the world’s billionaires grows
* The sum of the capitals of all the participants in the Forbes list is taken.
According to Oxfam.
BUDGET CUT AND DEBT BUBBLE
Meanwhile, the economic crisis is just beginning. It can cover at least a third of all the countries in the world. And the poorest will suffer the most.
– Entire countries are on the verge of bankruptcy and debt payments are out of control. Many are also planning brutal spending cuts. Over the next five years, three-quarters of governments plan to cut spending, with cuts totaling $7.8 trillion, Oxfam calculated.
Experts in the field of inequality believe that it has reached an unprecedented level. At the same time, if nothing changes, inequality in the world will only increase. And this threatens a humanitarian catastrophe, conflicts and revolutions. “Cream” shoots only a small handful of people. While the rest literally live from salary to salary.
“It’s a system that continues to work very, very well for a small group of people at the top, predominantly wealthy white men living in the global north,” says Oxfam.
Experts in the field of inequality believe that it has reached an unprecedented level.
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And they offer a simple solution: impose additional taxes on the super-rich people in every country. This will free up $1.7 trillion each year. And the money received can be used both to support the poorest and to social needs: education, health, etc.
TAXES WERE HIGH BEFORE
Experts suggest not inventing something new, but going back to the recent past. Tax rates for the rich were much higher a few decades ago. And this did not prevent the economies of many countries from developing rapidly.
– In the United States, the top marginal federal income tax rate was 91% between 1951 and 1963. The top estate tax rate was 77% until 1975. And the corporate tax rate averaged just over 50% in the 1950s and 1960s. Similar levels of taxes were found in other wealthy countries, inequality researchers recall.
How progressive taxes are changing the richest in the developed world
According to the OECD.
According to them, in periods prior to the global crisis, tax rates for the richest were raised. But this did not happen during the pandemic. Instead, 95% of countries have not increased or even reduced taxes on wealthy individuals and businesses. Yes, and most billionaires have learned to find every possible tax loophole. As a result, the situation became simply absurd.
– The owner of one of the largest companies in the world Amazon -Jeff Bezos- pays only 1% of income in the form of taxes. While Aber Kristin, a market vendor in northern Uganda who sells rice, flour and soybeans, earns $80 a month. And he pays taxes on this money at a rate of 40%, the report says.
Oxfam believes that the super-rich should pay at least 60% of their income. In addition, it is necessary to impose heavy taxes not only on the profits of their corporations, but also on property. And every country in the world must do this so that global oligarchs don’t have a chance to escape to some tax haven.
“The revenue received from a new wave of progressive taxes must be used to build a fairer, more equitable and sustainable future for all of us,” the experts pompously state at the end of their report.
PS By the way, in Russia taxes on the rich are among the lowest in the world. What to do with it in the conditions of our budget deficit? Is it worth finally introducing a progressive scale, or rather to return it? More on this in one of our upcoming articles.
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