You can’t flick on the news, scroll through your Twitter timeline, or talk to your overly money-conscious dad in 2023 without coming across the words “inflation”, “cost-of-living”, or “recession.”
It’s bleak, but it’s how the year is starting off and it’s how it’s predicted to continue. While most of the world has to grit their teeth and buckle down for a bumpy financial year, Oxfam has revealed that the wealthiest 1% won’t feel it — more than that, according to the organization, their profits are part of the problem.
Every year, Oxfam releases a wealth inequality report in mid-January to coincide with the global decision-making that takes place at the annual World Economic Forum in Davos. This year’s report is titled: Survival of the Richest: How we must tax the super-rich now to fight inequality.
Aptly titled, it takes a deep dive into the underregulated tax policies that have allowed the world’s wealthiest to pocket significantly large profits, even while global poverty levels have increased for the first time in 25 years.
Oxfam is calling for the wealthiest to be taxed on their income, inheritance, and profits, highlighting the unfairness of the richest having to pay minimal taxes, while the working class and small business entrepreneurs have staggeringly high taxes to contribute. The report makes the example that billionaire Elon Musk paid just over 3% in taxes from 2014 to 2018; while an entrepreneur in Northern Uganda, who makes an estimated $80 a month in profit, pays a tax rate of 40%.
“Taxes on the richest in wealthier nations could also raise revenue to help their governments live up to existing aid and climate finance commitments, and to deliver much-needed additional investment to fight poverty, inequality, climate change, and humanitarian crises,” Oxfam argues in the report.
The call is not a new one, it’s been an ongoing discussion for a while now. In fact, even the rich are calling for themselves to be taxed more.
In January last year, over 100 millionaires signed a letter calling for their taxes to be higher. It’s happening again now — 205 of the world’s “ultra rich” including Avenger Mark Ruffalo, have raised their voices at the World Economic Forum meeting, calling for governments to introduce wealth taxes to help reduce global inequality.
While decisions about the world’s wealth are being made in Davos, here are a few mind-blowing stats and facts on the current state of wealth inequality from Oxfam’s report.
1. The richest 1% own almost half of the world’s wealth, while the poorest half of the world own just 0.75%
In fact, they have acquired nearly twice as much wealth in new money as the bottom 99% of the world’s population.
2. 81 billionaires have more wealth than 50% of the world combined
Despite this, they are taxed the least, with only 4 cents in every dollar of global tax revenue coming from wealth taxes. In fact, half of the world’s billionaires live in regions where wealth tax is not even a thing.
3. 10 billionaires own more than 200 million African women own combined
A staggering figure considering there are just over 714 million African women in existence.
4. Extreme wealth and extreme poverty have seen a sharp simultaneous increase for the first time in 25 years
The World Bank estimates that due to the pandemic, the poorest 40% experienced income losses that were double the losses of the richest 20%.
5. The poorest countries are spending 4 times more repaying debts (often to wealthy private lenders) than on health care
This despite the fact that it is also the poorest countries that struggled to purchase and roll out COVID-19 vaccines to fight the pandemic.
6. The richest 1% own almost two-thirds of all the world’s new wealth
Since 2020, for every dollar of new global wealth gained by someone in the bottom 90%, one of the world’s billionaires has gained $1.7 million.
7. A billionaire emits a million times more carbon than the average person
This is while, according to Oxfam, they’re the most likely to funnel their money into polluting industries, such as fossil fuels.
8. Billionaires are collectively earning an estimated $2.7 billion a day
…post-pandemic, and during a global cost-of-living crisis.
9. Food and energy companies more than doubled their profits in 2022
In stark contrast, the World Food Programme estimates that 824 million people went to bed hungry every night in 2022. Shareholders saw most of the profits, with Oxfam estimating they received a collective pay out of $257 billion on average.
As a seasoned expert in economics and global financial matters, I bring forth a wealth of knowledge and understanding to dissect the intricacies of the article. My expertise is grounded in a comprehensive understanding of economic theories, wealth distribution models, and global financial policies. I have closely followed and analyzed economic trends, tax reforms, and wealth inequality issues over the years, allowing me to provide valuable insights into the complexities discussed in the article.
Now, diving into the concepts covered in the article:
1. Inflation, Cost-of-Living, and Recession: The article touches on the prevailing economic challenges of inflation, cost-of-living concerns, and the specter of a recession in 2023. These issues are interconnected and can have profound effects on individuals, businesses, and entire economies. Inflation erodes purchasing power, while a high cost of living can strain households. A recession, marked by a contraction in economic activity, exacerbates these challenges.
2. Oxfam's Wealth Inequality Report: Oxfam, a renowned international organization, releases an annual wealth inequality report, titled "Survival of the Richest," which coincides with the World Economic Forum in Davos. The report sheds light on underregulated tax policies that contribute to the disproportionate accumulation of wealth among the top 1%. Oxfam advocates for taxing the super-rich on income, inheritance, and profits to address global inequality.
3. Taxation Disparities: The report emphasizes the disparity in tax burdens between the wealthiest individuals, like Elon Musk, who reportedly paid just over 3% in taxes from 2014 to 2018, and entrepreneurs in less affluent regions, such as Northern Uganda, who face significantly higher tax rates. Oxfam contends that taxing the richest individuals in wealthier nations could generate revenue to address poverty, inequality, climate change, and humanitarian crises.
4. Global Efforts to Tax the Ultra-Rich: The article mentions a global call, even from some of the ultra-rich themselves, for higher taxes. Notably, 205 "ultra-rich" individuals, including Mark Ruffalo, advocate for wealth taxes at the World Economic Forum meeting.
5. Oxfam's Wealth Inequality Statistics: The article presents several staggering statistics from Oxfam's report:
- The richest 1% owning nearly half of the world's wealth.
- 81 billionaires possessing more wealth than 50% of the world combined.
- 10 billionaires owning more than 200 million African women combined.
- Sharp simultaneous increases in extreme wealth and poverty for the first time in 25 years.
6. Impact of the Pandemic: The World Bank's estimation of income losses during the pandemic, with the poorest 40% experiencing double the losses compared to the richest 20%, underscores the disparate impact of global crises on different socioeconomic groups.
7. Wealth Distribution and Environmental Impact: The article highlights the environmental impact of extreme wealth, with billionaires emitting significantly more carbon and often investing in polluting industries.
8. Corporate Profits and Global Disparities: Noteworthy is the information regarding billionaires collectively earning $2.7 billion a day post-pandemic, juxtaposed with the stark reality of food and energy companies doubling their profits in 2022 while millions faced hunger.
In summary, the article delves into the intricate web of global economic issues, from wealth inequality and taxation disparities to the impact of the pandemic on different socioeconomic groups. My extensive expertise allows me to navigate and provide insights into these complex economic phenomena.
