World’s 1% captured almost two-thirds of recent wealth created in two years: report

For each dollar of recent global wealth earned by an individual in the underside 90% in the course of the first two years of the COVID-19 pandemic, a billionaire got $1.7 million, in keeping with a brand new evaluation from the anti-poverty group Oxfam.

That signifies that even in an era marked by the pandemic, nearly 15 million excess deaths and rising consumer prices, the richest 1% captured almost two-thirds of all recent wealth created between December 2019 and December 2021, the report said.

Oxfam said a “flood of public money pumped into the economy by wealthy countries” in the course of the pandemic, combined with tax policies that favor the rich, higher corporate profits and rising prices, helped to fuel a surge in wealth for the world’s richest people. To reverse a trend of widening inequality, taxes have to be raised on the richest people on this planet, the organization said.

“Although billionaire fortunes have fallen barely since their peak in 2021, they continue to be trillions of dollars higher than before the pandemic,” Oxfam said in its report. “This crisis-driven bonanza for the super-rich has come on top of a few years of dramatically growing fortunes at the highest, and growing wealth inequality.”

The organization released its report because the world’s elite descend on Davos, Switzerland, for the World Economic Forum annual meeting.

“It’s not been hard to seek out a world leader who has something to say about extreme inequality, however it’s been really, really hard to seek out any of them doing something about it,” Nabil Ahmed, Oxfam America’s director of economic justice, told MarketWatch. “We’ve really lost a decade to lip service about inequality, and the extraordinary rise in extreme inequality over the past decade — but especially over this pandemic period — reflects that lost opportunity to act.”

Oxfam, which relied on data from Credit Suisse’s global wealth report, in addition to Forbes’ Billionaires List and Forbes’ Real-Time Billionaires List, for its report, found that over the past 10 years, the world’s richest 1% nabbed greater than half of all recent global wealth, with their share of worldwide wealth only accelerating further in the course of the pandemic. 

“Oxfam believes that, as a start line, the world should aim to halve the wealth and variety of billionaires between now and 2030, each by increasing taxes on the highest 1% and adopting other billionaire-busting policies,” the report said. “This might bring billionaire wealth and numbers back to where they were only a decade ago in 2012.”

A tax of as much as 5% on the world’s richest people could amount to $1.7 trillion a 12 months, Oxfam said.

‘It’s not been hard to seek out a world leader who has something to say about extreme inequality, however it’s been really, really hard to seek out any of them doing something about it.’

— Nabil Ahmed, Oxfam America’s director of economic justice

To effectively tax the rich, Oxfam urged, amongst other measures, a quadrupling of tax rates on capital gains, saying countries “must be sure that they tax gains from capital a minimum of as much, and preferably more, than income from work.”

Currently, tax rates for capital gains are 18% on average across greater than 100 countries, Oxfam said.

There has similarly been a “great erosion” of top marginal income tax rates and company tax rates, Ahmed noted.

Some countries are taking motion, though. José Antonio Ocampo, the minister of finance and public credit in Colombia, wrote in Oxfam’s report that his country is implementing reforms to tax the rich, and corporations.

“Taxing the wealthiest is not any longer an option — it’s a must,” he said. “Global inequality has exploded, and there is no such thing as a higher option to tackle inequality than by redistributing wealth.”

Last 12 months’s Inflation Reduction Act within the U.S. also led to a 15% minimum corporate tax rate, Ahmed noted, and “we’ve seen actually the sort of debate here within the U.S. to get us to a more progressive place,” even when it hasn’t gone far enough quite yet.

Meanwhile, President Joe Biden last 12 months endorsed a “billionaire minimum income tax” on the total incomes of the ultra-wealthy, including on unrealized gains, which might require the highest 0.01% of earners to pay a minimum of 20% in taxes. In 2021, Democrats pushed the same wealth tax as a method of funding Biden’s Construct Back Higher agenda. 

Opponents of those initiatives have said the proposed taxes, other than potentially being unconstitutional, could be complicated and expensive. A handful of billionaires have also publicly pushed back on Democratic proposals to slap recent taxes on the rich lately. 

The efforts gained momentum after a 2021 ProPublica report found that among the wealthiest people within the U.S., including Jeff Bezos, Michael Bloomberg, Carl Icahn and George Soros, had at times paid nothing in federal income tax, with the investigative news outlet noting their rising gains from stock and property holdings weren’t considered taxable income until they were sold.

ProPublica reported that Bloomberg and Icahn said they paid what they legally owed in taxes, while a spokesperson for Soros said he had lost money on investments between 2016 and 2018, which meant he didn’t owe federal income tax. The publication said Bezos’s representatives “declined to receive detailed questions on the matter.”

Still, not much has modified — a minimum of thus far.

“Previous moments of worldwide crisis have seen increases in taxation of the richest, within the spirit of solidarity,” Oxfam said. “Disappointingly, this didn’t occur in the course of the peak of the pandemic. As a substitute, 95% of nations either didn’t increase, and even lowered, taxes on wealthy people and corporations.”

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