1% of world’s population earns 2/3 of global revenue since pandemic – Oxfam

Jan 22, 2023 News

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Kaieteur News – Global non-profit organisation against inequality, poverty and injustice, Oxfam, has reported massive profits made by the world’s richest people; snagging almost two-thirds of the global revenue generated by the global population.

In its latest report, ‘Survival of the richest’, Oxfam stated that billionaires made huge gains during the pandemic, and continued to increase revenue as other factors also drove up the cost of commodities and services worldwide.

Oxfam said that while the scale of wealth accumulated by those at the top is already at record levels, it has accelerated given the global poly-crisis that has brought huge new wealth to tiny elite.

It said that “over the last 10 years, the richest 1 percent of humanity has captured more than half of all new global wealth.” It said, “Since 2020, according to Oxfam analysis of Credit Suisse Data, this wealth grab by the super-rich has accelerated, and the richest 1 percent have captured almost two-third of all new wealth. This is six times more than the bottom 90 percent of humanity,” the advocacy group exclaimed. It said that since 2020, for every dollar of new global wealth gained by someone in the bottom 90 percent, one of the world’s billionaires gained $1.7M.

 

“Billionaires have seen huge gains during the pandemic. A flood of public money pumped into the economy by rich countries, which was necessary to support their populations, also drove up asset prices and wealth at the top. This meant that in the absence of progressive taxation, the super-rich pocketed unprecedented fortunes. Although billionaire fortunes have fallen slightly since their peak in 2021, they remain trillions of dollars higher than before the pandemic,” Oxfam disclosed.

It said that the crisis-driven bonanza for the super-rich has also come on top of many years of dramatically growing fortunes at the top and growing wealth inequality. It was related that the current cost-of-living crisis, with spiralling food and energy prices, is also creating dramatic gains for many at the top. Food and energy corporations are seeing record profits and making record payouts to their rich shareholders and billionaire owners. Corporate price profiteering is driving at least 50 percent of inflation in Australia, the US and Europe, in what is as much a ‘cost-of-profit’ crisis as a cost-of-living one, said Oxfam.

The group explained that extreme concentrations of wealth undermine economic growth, corrupt politics and the media, corrode democracy and propel political polarization.

“New Oxfam research also shows that the richest are key contributors to climate breakdown: a billionaire emits a million times more carbon than the average person,” the group said. “And billionaires are twice as likely as the average investor to invest in polluting industries like fossil fuels,” they added.

It was noted that “the very existence of booming billionaires and record profits, while most people face austerity, rising poverty and a cost-of-living crisis, is evidence of an economic system that fails to deliver for humanity. For too long, governments, international financial institutions and elites have misled the world with a fictional story about trickle-down economics, in which low tax and high gains for a few would ultimately benefit us all.”

It is a story without any basis in truth, Oxfam asserted. “It is a story, and an economic system that has left us without the tools or even the imagination to face this new age of crisis. It is a system that is largely discredited, yet continues to monopolize the minds of our leaders. It is a system that continues to work very well indeed for a small group of people at the top –predominantly rich, white men based in the global north.”

Oxfam said that to break the discredited cycle of never-ending billionaire wealth accumulation, governments need to address all the many ways in which the economy is rigged in their favour, including on labour laws, privatization of public assets, CEO compensations and much more. The group said its current report is to shine a light on one of the key solutions it believes to hold immense potential; taxing the rich.

Oxfam believes that, as a starting point, the world should aim to halve the wealth and number of billionaires between now and 2030, both by increasing taxes on the top 1percent and adopting other billionaire-busting policies.

Oxfam said this would bring billionaire and numbers back to where they were just a decade ago in 2012. “The eventual aim should be to go further, and to abolish billionaires altogether, as part of a fairer, more rational distribution of the world’s wealth. Tax will play a crucial role in delivering that vision, but it will only happen if we make a drastic break with decades of tax cuts for the rich and corporations,” the group said.

It reported that currently, for every $1 raised in tax, only four cents come from taxes on wealth. The failure to tax wealth is most pronounced in low and middle-income countries, where inequality is highest. It said that two-thirds of countries do not have any form of inheritance tax on wealth and assets passed to direct descendants and half of the world’s billionaires now live in countries with no such tax.

This means $5 trillion will be passed on tax-free to the next generation, a sum greater than the Gross Domestic Product of Africa. “A new, powerful, and unaccountable aristocracy is being created in front of our eyes,” the rights group posited.

Oxfam noted also that top rates of tax on income have become lower and less progressive, with the average tax rate on the richest falling from 58 percent in 1980 to 42 percent more recently in Economic Co-operation and Development (OECD) countries. Across 100 countries, the average rate is even lower, at 31 percent. Oxfam said that rates of tax on capital gains – in most countries the most important source of income for the top 1percent – are only 18percent on average across more than 100 countries. The group highlighted that only three countries tax income from capital more than income from work.

“The results have been staggering,” Oxfam said. It related that “zooming in at the very top exposes that many of the richest men on the planet today get away with paying hardly any tax. For example, one of the richest men in history, Elon Musk, has been shown to pay a ‘true tax rate’ of 3.2 percent while another of the richest billionaires, Jeff Bezos, pays less than 1percent. In contrast, one of the market traders that Oxfam works with in Uganda, Aber Christine, pays 40 percent of her profits in tax.”

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• ‘Survival of the richest’, Elon Musk, Global non-profit organisation, Oxfam, population

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