January 29, 2023

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A call for new taxes on the super-rich after 1% of their new wealth | inequality

Oxfam has called for immediate action to tackle widening post-Covid global inequality after revealing that nearly two-thirds of new wealth created since the start of the pandemic has gone to the richest 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 top earners had $26tn (£21tn) of new wealth up to the end of 2021. That represents 63% of all new wealth, with the rest It goes to the remaining 99% of people.

Oxfam said, for the first time in a quarter of a century, that the increase in excessive wealth was accompanied by an increase in extreme poverty, and called for new taxes on the super-rich.

Policies introduced to combat the economic impact of Covid 19 – such as interest rate cuts and a money creation process known as quantitative easing – have boosted the value of property and stocks, which tend to be owned. richer people.

The report said that for every $1 of new global wealth earned by someone in the bottom 90% in the past two years, every Billionair He earned nearly $1.7 million. Despite slight declines in 2022, the combined wealth of billionaires increased by $2.7 billion per day. The pandemic gains came after a decade in which the number and wealth of billionaires doubled.

Danny Sriskandarajah, Chief Executive of Oxfam UK: “Current economic realities are an affront to basic human values. Extreme poverty is increasing for the first time in 25 years and nearly a billion people go hungry, but for billionaires, every day is a great fortune.

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Multi-million crises have pushed millions to the brink while our leaders have failed to understand the nettle – governments must stop acting in the special interests of the few.

How can we accept a system in which the poorest people in many countries pay much higher tax rates than the very rich? Governments should tax the super-rich higher now.”

Oxfam said the extreme concentration of wealth had led to weak growth, corruption in politics and the media, undermining democracy and leading to political polarization. Filthy rich The charity added that it has been a major contributor to the climate crisis, with the billionaire releasing a million times more carbon emissions than the average person. They were also twice as likely to invest in polluting industries, compared to the average investor.

The report called on governments to impose immediate, one-off wealth taxes on the richest 1%, along with windfall taxes to clamp down on profiteering during the global cost of living crisis. Then, there should be a permanent increase in taxes for the rich, with higher rates for millionaires and billionaires.

In support of its call for redistribution of wealth, Oxfam said:

  • Food and energy companies more than doubled their profits in 2022, paying out $257 billion to wealthy shareholders at a time when more than 800 million people went hungry.

  • Only 4 cents of every dollar of tax revenue came from wealth taxes, and half of the world’s billionaires live in countries that do not tax inheritance on money they give to their children.

  • A 5% tax on the world’s millionaires and billionaires could raise $1.7 trillion annually, enough to lift two billion people out of poverty, and fund a global plan to end hunger.

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In the foreword to the report, Colombia’s Finance Minister, José Antonio Ocampo, said: “Taxing the rich is no longer an option – it is a must. Global inequality has exploded, and there is no better way to tackle inequality than to redistribute wealth.”

He added, “Fairness is at the heart of Colombia’s tax reforms. In concrete terms, this means a new wealth tax, higher taxes on high earners and large corporations that reap extraordinary profits in international markets, and an end to tax incentives that exist without an obvious social or environmental justification.”

“We are also introducing taxes on digital services and adopting a minimum corporate tax rate, based on the international tax deal.”