Oxfam has revealed that nearly two-thirds of all new wealth since the start of the pandemic has gone to the top 1% and called for immediate action to address rising global inequality in the post-pandemic era.
In the report, which coincides with the World Economic Forum’s annual gathering of the global elite in Davos, the charity said the wealthiest had acquired $26tn (£21tn) in new wealth by the end of 2021. This accounts for 63% of the total new wealth, with the remainder going to the remaining 99%.
For the first time in a quarter century, Oxfam said the rise in extreme wealth had been accompanied by a rise in extreme poverty and called for a new tax on the super-rich.
Policies introduced in response to the economic impact of Covid 19 – such as lower interest rates and a money creation process known as quantitative easing – have boosted the value of property and stocks, which are often owned by the wealthy.
For every dollar of new wealth earned by the bottom 90 percent of the world over the past two years, each billionaire received about $1.7 million, the report said. Despite a slight decline in 2022, the total wealth of billionaires will increase by $2.7 billion per day. Ten years later, the number and wealth of billionaires has doubled, and the gains from the pandemic are here.
Danny Sriskandarajah, CEO of Oxfam UK: “The current economic reality is an affront to basic human values. Extreme poverty has increased for the first time in 25 years and nearly a billion people are going hungry, but for billionaires every day They are all millionaires.
“Multiple crises have pushed millions to the brink, and our leaders have failed to fix them – the government must stop acting in the vested interest of the few.
“How can we accept a system where the poorest people in many countries pay much higher rates of tax than the super-rich? The government must now tax the super-rich even more.”
Oxfam says extreme concentrations of wealth lead to slower growth, corrupt politics and the media, corrode democracy and lead to political polarization. The charity added that the super-rich are major contributors to the climate crisis, with a single billionaire emitting a million times more carbon than the average person. They were also twice as likely to invest in polluting industries compared to the average investor.
The report calls on governments to immediately impose a one-off wealth tax on the top 1% alongside a windfall profit tax to crack down on profiteering amid a global cost of living crisis. Then, wealth taxes should be permanently increased, with higher rates for multimillionaires and billionaires.
In support of its call for wealth redistribution, Oxfam said:
Profits of food and energy companies more than double by 2022, paying out $257 billion to wealthy shareholders at a time when more than 800 million people are going hungry.
Only 4 cents of every dollar of tax revenue comes from wealth taxes, and half the world’s billionaires live in countries with no inheritance tax on the money they give their children.
A tax of up to 5 percent on the world’s multimillionaires and billionaires could raise $1.7 trillion a year, enough to lift two billion people out of poverty and fund global plans to end hunger.
In the report’s foreword, Colombian Finance Minister José Antonio Ocampo said: “Taxing the wealthiest is no longer an option—it is a must. Global inequality is already bursting, and there is no better option than redistribution.” Wealth has a better way to tackle inequality.”
He added: “Fairness is at the heart of Colombia’s tax reform. Specifically, this means a new wealth tax, higher taxes on high earners and large companies that make excess profits in international markets, and ending Tax incentives that exist for no clear social or environmental justification.
“We are also implementing a digital services tax and introducing a corporate minimum tax rate on top of international tax agreements.”