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

Oxfam has called for immediate action to tackle a post-Covid expansion of global inequality after it emerged that nearly two-thirds of new wealth amassed since the pandemic began has gone to the wealthiest 1%.

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

Oxfam said that for the first time in a quarter of a century, the increase 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 counter the economic impact of Covid 19 – such as interest rate cuts and the money creation process known as quantitative easing – increased the value of real estate and stocks, which are typically owned by wealthier people.

The report said that for every $1 in new global wealth earned by a person in the bottom 90% over the past two years, each billionaire earned about $1.7 million. Despite minor declines in 2022, the combined fortunes of billionaires had increased by $2.7 billion per day. Pandemic profits came after a decade in which both the number and wealth of billionaires had doubled.

Danny Sriskandarajah, CEO 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 celebration.

“Multiple crises have pushed millions to the brink while our leaders fail to grasp the stake – governments must stop acting for the vested interests of a 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 now introduce higher taxes for the super-rich.”

Oxfam said extreme concentrations of wealth led to weaker growth, corrupt politics and media, undermined democracy and led to political polarization. The super-rich were major contributors to the climate crisis, the charity added, with a billionaire emitting a million times more carbon than the average person. They also invested twice as much in polluting industries as the average investor.

The report called on governments to immediately introduce one-off wealth taxes on the wealthiest 1%, along with windfalls to curb profit-seeking during the global cost-of-living crisis. Then there should be a permanent increase in taxes on the wealthy, 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 their profits by 2022 and paid out $257 billion to wealthy shareholders at a time when more than 800 million people were starving.

  • Only 4 cents of every dollar of tax revenue came from wealth taxes, and half of the world’s billionaires lived in countries without inheritance taxes on 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, Colombian Finance Minister José Antonio Ocampo said: “Taxing the wealthiest is no longer an option – it is a must. Global inequality has exploded and there is no better way to tackle inequality than by redistributing wealth.”

He added: “Fairness is at the heart of Colombia’s tax reforms. In concrete terms, this means a new wealth tax, higher taxes for high-income earners and large 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 taxes on digital services and adopting a minimum corporate tax rate, building on the international tax agreement.”

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