Richest 1% Bag Nearly Twice As Much Wealth As The Rest Of The World Put Together Over The Past Two Years, Finds Oxfam Study

By Countercurrents Collective

The rich are having good days as they always have. Even the pandemic could not brake their stockpiling of wealth. The super-rich outstrip their extraordinary grab of half of all new wealth in past decade. The richest 1% of the world bag nearly twice as much wealth as the rest of the world put together over the past two years, finds Survival of the Richest, an Oxfam International (OI) study released on the first day of the World Economic Forum (WEF), January 16, 2023, being held in Davos, Switzerland.

The richest 1% grabbed nearly two-thirds of all new wealth worth $42 trillion created since 2020, almost twice as much money as the bottom 99% of the world’s population, reveals the report. During the past decade, the richest 1% had captured around half of all new wealth.

1.7 Billion Workers

Billionaire fortunes are increasing by $2.7 billion a day even as at least 1.7 billion workers now live in countries where inflation is outpacing wages.
A tax of up to 5% on the world’s multi-millionaires and billionaires could raise $1.7 trillion a year, enough to lift 2 billion people out of poverty. According to the World Bank, extreme poverty increased in 2020 for the first time in 25 years. At the same time, extreme wealth has risen dramatically since the pandemic began.

The report shows that while the richest 1% captured 54% of new global wealth over the past decade, this has accelerated to 63% in the past two years. $42 trillion of new wealth was created between December 2019 and December 2021. $26 trillion (63%) was captured by the richest 1%, while $16 trillion (37%) went to the bottom 99%. According to Credit Suisse, individuals with more than $1 million in wealth sit in the top 1% bracket.

Wealth Climbs

News from Oxfam said:

The billionaire class is $2.6 trillion richer than before the pandemic, even if billionaire fortunes slightly fell in 2022 after their record-smashing peak in 2021. The world’s richest are now seeing their wealth climb again.

U.S., UK, Australia

In the US, the UK and Australia, studies have found that 54%, 59% and 60% of inflation, respectively, was driven by increased corporate profits. In Spain, the CCOO (one of the country’s largest trade unions) found that corporate profits are responsible for 83.4% of price increases during the first quarter of 2022.

The news said:

The World Bank announced that the world has almost certainly lost its goal of ending extreme poverty by 2030 and that “global progress in reducing extreme poverty has grind[ed] to a halt” amid what the Bank says was likely to be the largest increase in global inequality and the largest setback in global poverty since WW2. The World Bank defines extreme poverty as living on less than $2.15 per day.

Elon Musk paid a “true tax rate” of just 3.27% from 2014 to 2018, according to ProPublica.

The $6.85 poverty line was used to calculate how many people (2 billion) an annual wealth tax of up to 5% on the world’s multi-millionaires and billionaires could lift out of poverty.

Polling consistently finds that most people across countries support raising taxes on the richest. For example, the majority of people in the US, 80% Indians, 85% of Brazilians and 69% of people polled across 34 countries in Africa support increasing taxes on the rich.

That is one of the ideas in a report by Oxfam International, which has sought for a decade to highlight inequality at the conclave of political and business elites in the Swiss ski resort of Davos.

The Ultra-Rich And Climate Crisis

OI’s research shows that the ultra-rich are the biggest individual contributors to the climate crisis. The richest billionaires, through their polluting investments, are emitting a million times more carbon than the average person. The wealthiest 1% of humanity are responsible for twice as many emissions as the poorest 50 percent and by 2030, their carbon footprints are set to be 30 times greater than the level compatible with the 1.5°C goal of the Paris Agreement.

The Rich In India

Billionaires in India have seen their fortune surge by 121% or ₹3,608 crore per day in real terms, since the Covid pandemic begun, the OI report showed. On the other hand, the bottom 50% of the population has continued to see their wealth chipped away and by 2020, according to the Survival of the Richest.

The richest 1% in India now own more than 40% of the country’s total wealth, while the bottom half of the population together share just 3% of wealth, the new study showed.

Releasing the India supplement of its annual inequality report on the first day of the WEF Annual Meeting here, the OI said that taxing India’s ten-richest at 5 percent can fetch entire money to bring children back to school.

Food Companies

Food companies making big profits as inflation has surged should face windfall taxes to help cut global inequality, said OI.

Billionaire wealth surged in 2022 with rapidly rising food and energy profits.

The report shows that 95 food and energy corporations have more than doubled their profits in 2022. They made $306 billion in windfall profits, and paid out $257 billion (84%) of that to rich shareholders.

The Walton dynasty, which owns half of Walmart, received $8.5 billion over the last year.

Indian billionaire Gautam Adani, owner of major energy corporations, has seen this wealth soar by $42 billion (46%) in 2022 alone.

Excess corporate profits have driven at least half of inflation in Australia, the U.S. and the UK.

Inflation And Wage

At the same time, at least 1.7 billion workers now live in countries where inflation is outpacing wages, and over 820 million people —roughly one in ten people on Earth —  are going hungry.

Eat Least And Last

Women and girls often eat least and last, and make up nearly 60% of the world’s hungry population. The World Bank says we are likely seeing the biggest increase in global inequality and poverty since WW2. Entire countries are facing bankruptcy, with the poorest countries now spending four times more repaying debts to rich creditors than on healthcare. Three-quarters of the world’s governments are planning austerity-driven public sector spending cuts — including on healthcare and education — by $7.8 trillion over the next five years.

The Irish Rich

The wealthiest 1% of Irish society now own more than a quarter of the country’s wealth or €232 billion, the report claims.

The research also shows that with €15 billion between them, the two richest people here have 50% more wealth than the poorest half of the population.

In total the study, based on data collated from Forbes, Credit Suisse and Wealth-X, found eight Irish people are worth over a billion euro, down one from last year.

But 1,435 individuals here are worth over €47m while 20,575 own over € 4.7 million.

Over the last decade, the numbers in both those categories has more than doubled the analysis finds, as wealth creation here grows.

Laying out how new wealth is distributed, the study claims that for every $100 or €93 of wealth created in Ireland over the past decade, a third has gone to the richest 1% and less than 50c to the bottom 50%.

The richest 1% has therefore gained 70 times more wealth than the bottom 50% in the last 10 years, Oxfam says.

While the top 10% of the population now owns nearly two thirds of the wealth, totalling €547 billion, but the bottom 50% of Irish society owns only 1% of wealth.

The Survival of the Richest is published on the opening day of the WEF. Elites are gathering in the Swiss ski resort as extreme wealth and extreme poverty have increased simultaneously for the first time in 25 years.

An OI release said:

“While ordinary people are making daily sacrifices on essentials like food, the super-rich have outdone even their wildest dreams. Just two years in, this decade is shaping up to be the best yet for billionaires —a roaring ‘20s boom for the world’s richest,” said Gabriela Bucher, Executive Director of OI.

“Taxing the super-rich and big corporations is the door out of today’s overlapping crises. It’s time we demolish the convenient myth that tax cuts for the richest result in their wealth somehow ‘trickling down’ to everyone else. Forty years of tax cuts for the super-rich have shown that a rising tide does not lift all ships — just the superyachts.”

A billionaire gained roughly $1.7 million for every $1 of new global wealth earned by a person in the bottom 90%. Billionaire fortunes have increased by $2.7 billion a day. This comes on top of a decade of historic gains — the number and wealth of billionaires having doubled over the last ten years.

Oxfam is calling for a systemic and wide-ranging increase in taxation of the super-rich to claw back crisis gains driven by public money and profiteering. Decades of tax cuts for the richest and corporations have fueled inequality, with the poorest people in many countries paying higher tax rates than billionaires.

Elon Musk, one of the world’s richest men, paid a “true tax rate” of about 3 percent between 2014 and 2018. Aber Christine, a flour vendor in Uganda, makes $80 a month and pays a tax rate of 40 percent.

Worldwide, only four cents in every tax dollar now comes from taxes on wealth. Half of the world’s billionaires live in countries with no inheritance tax for direct descendants. They will pass on a $5 trillion tax-free treasure chest to their heirs, more than the GDP of Africa, which will drive a future generation of aristocratic elites. Rich people’s income is mostly unearned, derived from returns on their assets, yet it is taxed on average at 18%, just over half as much as the average top tax rate on wages and salaries.

The report shows that taxes on the wealthiest used to be much higher. Over the last forty years, governments across Africa, Asia, Europe, and the Americas have slashed the income tax rates on the richest. At the same time, they have upped taxes on goods and services, which fall disproportionately on the poorest people and exacerbate gender inequality. In the years after WW2, the top U.S. federal income tax rate remained above 90 percent and averaged 81 percent between 1944 and 1981. Similar levels of tax in other rich countries existed during some of the most successful years of their economic development and played a key role in expanding access to public services like education and healthcare.

“Taxing the super-rich is the strategic precondition to reducing inequality and resuscitating democracy. We need to do this for innovation. For stronger public services. For happier and healthier societies. And to tackle the climate crisis, by investing in the solutions that counter the insane emissions of the very richest,” said Bucher.

According to new analysis by the Fight Inequality Alliance, Institute for Policy Studies, Oxfam and the Patriotic Millionaires, an annual wealth tax of up to 5% on the world’s multi-millionaires and billionaires could raise $1.7 trillion a year, enough to lift 2 billion people out of poverty, fully fund the shortfalls on existing humanitarian appeals, deliver a 10-year plan to end hunger, support poorer countries being ravaged by climate impacts, and deliver universal healthcare and social protection for everyone living in low- and lower middle-income countries.

Oxfam’s calculations are based on the most up-to-date and comprehensive data sources available. Figures on the very richest in society come from the Forbes billionaire list.

All amounts are expressed in US dollars and, where relevant, have been adjusted for inflation using the US consumer price index.

A Few Of The Key Findings Of The Report:

  • The India supplement of the inequality report said that the richest one per cent in India now own more than 40 % of the country’s total wealth, while the bottom half of the population together share just 3% of wealth.
  • Making a case for taxing the rich, the report said that taxing India’s ten richest at 5% can fetch entire money to bring children back to school.
  • It also argued that one-off tax on unrealized gains from 2017–2021 on Gautam Adani, could have been enough to employ more than five million Indian primary school teachers for a year.
  • The report further said that if India’s billionaires are taxed once at 2% on their entire wealth, it would support the requirement of ₹40,423 crore for the nutrition of malnourished in the country for the next three years.
  • “A one-time tax of 5% on the 10 richest billionaires in the country ( ₹1.37 lakh crore) is more than 1.5 times the funds estimated by the Health and Family Welfare Ministry ( ₹86,200 crore) and the Ministry of Ayush ( ₹3,050 crore) for the year 2022-23,” it added.
  • In 2021-22, only 3% of GST coming from the top 10% while approximately 64% of the total ₹14.83 lakh-crore in Goods and Services Tax (GST) came from bottom 50% of the population.
  • According to the report, taxing the top 100 Indian billionaires at 2.5%, or taxing the top 10 Indian billionaires at 5% would nearly cover the entire amount required to bring the children back into school.
  • Oxfam said the report is a mix of qualitative and quantitative information to explore the impact of inequality in India.
  • The total number of billionaires in India increased from 102 in 2020 to 166 in 2022 while the combined wealth of India’s 100 richest has touched USD 660 billion ( ₹54.12 lakh crore), an amount that could fund the entire Union Budget for more than 18 months.

Oxfam India urged the Union finance minister to introduce one-off solidarity wealth taxes and windfall taxes to end crisis profiteering. It also demanded a permanent increase in taxes on the richest 1% and especially raise taxes on capital gains, which are subject to lower tax rates than other forms of income.

Oxfam has called on governments to:​​​​​​​

  • Introduce one-off solidarity wealth taxes and windfall taxes to end crisis profiteering.
  • Permanently increase taxes on the richest 1 percent, for example to at least 60 percent of their income from labor and capital, with higher rates for multi-millionaires and billionaires. Governments must especially raise taxes on capital gains, which are subject to lower tax rates than other forms of income.

Tax the wealth of the richest 1 percent at rates high enough to significantly reduce the numbers and wealth of the richest people, and redistribute these resources. This includes implementing inheritance, property and land taxes, as well as net wealth taxes.

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16 January 2023

Source: countercurrents.org

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