The richest sliver of the global population has accumulated more than $40 trillion in new wealth over the past decade, highlighting a deepening inequality that threatens both democracy and the environment. This alarming trend is outlined in a recent analysis by Oxfam, released ahead of the G20 finance ministers’ meeting. The report reveals that the global 1 percent captured $42 trillion in new wealth, nearly 34 times more than the entire bottom 50 percent of the world’s population.
Oxfam’s analysis brings to light the stark disparity in wealth distribution. The global 1 percent accumulated $42 trillion in new wealth over the past ten years, a figure that dwarfs the combined wealth increase of the bottom 50 percent of the world’s population. Michael Taylor, founder of the Australian Independent Media Network, aptly described this disparity as “disgusting.”
The report attributes this surge in wealth to favorable tax policies for the rich. Since 1980, taxes on the wealth and income of the richest have been slashed by 32 percent, contributing significantly to the widening gap. Oxfam highlights that billionaires are currently paying a tax rate equivalent to less than 0.5 percent of their wealth. Max Lawson, Oxfam’s head of inequality policy, criticized governments for their failure to curb this growing inequality, stating, “The richest 1 percent of humanity continues to fill their pockets while the rest are left to scrap for crumbs.”
Oxfam’s research further reveals that less than eight cents in every dollar raised in tax revenue in G20 countries now comes from taxes on wealth. The share of national income going to the top 1 percent of earners in G20 countries has increased by 45 percent over the last four decades, while top tax rates on their incomes were cut by roughly a third.
In response to this growing inequality, there is a rising call for the implementation of a global tax on billionaire wealth. Economist Gabriel Zucman of the University of California, Berkeley, has proposed a 2 percent minimum tax on the wealth of global billionaires, which could generate up to $250 billion annually. This revenue could fund critical areas such as climate investments, education, and healthcare programs. Zucman emphasizes that “a common taxation standard for billionaires has become technically possible,” stressing that “implementing it is a question of political will.”
Brazilian President Luiz Inácio Lula da Silva has championed this cause, despite resistance from powerful nations like the United States, which boasts the highest number of billionaires. In 2018, U.S. billionaires paid a lower effective tax rate than working-class Americans, underscoring the urgent need for tax reform.
Despite the compelling case for a global billionaire wealth tax, political resistance remains strong. G20 nations, which are home to roughly 80 percent of the world’s billionaires, are likely to rebuff Lula’s proposal. Instead, they are expected to pursue prolonged research on taxation and inequality, delaying immediate action.
Bloomberg reports that the G20 finance ministers are leaning towards supporting progressive taxation in principle but stopping short of endorsing a global billionaire tax. Reuters similarly noted that the ministers are preparing a joint statement advocating for progressive taxation without committing to specific measures.
The surge in wealth among the richest 1 percent starkly contrasts with the growing misery faced by large swaths of the global population. The United Nations’ Food and Agriculture Organization (FAO) recently reported that up to 757 million people may have faced hunger last year. Eric Munoz, Oxfam’s food policy expert, stressed the need for deeper, structural policy changes to address economic injustice, climate change, and conflict, all of which drive hunger.
The disparity in wealth increases is further highlighted by Oxfam’s finding that the average wealth per person in the top 1 percent rose by nearly $400,000 in real terms over the last decade, compared to just $335 for a person in the bottom half.
Public support for increasing taxes on the rich is widespread. Polling data shows that majorities in various countries back higher taxes on the wealthy. For instance, 80 percent of Indians, 85 percent of Brazilians, and 69 percent of people across 34 African countries support raising taxes on the rich. Among millionaires polled in G20 countries, nearly three-quarters support higher taxes on wealth, with over half viewing extreme wealth as a threat to democracy.
Implementing a global billionaire tax is technically feasible, thanks to recent progress in international tax cooperation. However, achieving this goal requires political will and commitment from world leaders. A global tax on billionaire wealth could play a crucial role in reducing inequality and funding essential programs that benefit society as a whole.
As Max Lawson pointed out, “Inequality has reached obscene levels, and until now governments have failed to protect people and planet from its catastrophic effects.” The time to act is now, to ensure a fairer, more equitable future for all.
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