A NEW study published by Oxfam International revealed that the richest 1 percent grabbed nearly two-thirds of all new wealth worth $42 trillion created globally since 2020. This is almost twice as much money as the bottom 99 percent of the world’s population has.
The report “Survival of the Richest” was published on the opening day of the World Economic Forum in Davos, Switzerland. The report suggests that while the world’s elites are gathering at a Swiss ski resort, extreme wealth and extreme poverty have increased simultaneously for the first time in 25 years.
Key takeaways of the study revealed that, for example, 9 richest Filipinos have more wealth than half of Filipinos. Also, billionaire fortunes globally 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.
According to the study, the richest 1 percent grabbed nearly two-thirds of all new wealth worth $42 trillion created globally since 2020, almost twice as much money as the bottom 99 percent of the world’s population. During the past decade, the richest 1 percent had captured around half of all new wealth.
“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 Oxfam International.
Starker inequality in PHL
Oxfam Philipinas said in the Philippines, the poor are unable to recover from back-to-back crises as many continue to suffer from the effects of the pandemic and steep prices of commodities such as red onions.
“Inequality experienced in the Philippines is starker with the 9 richest Filipinos having more wealth than the bottom half [55 million[] of the population,” Oxfam Pilipinas Executive Director Erika Geronimo said in a news release.
Geronimo cited Forbes’ Billionaires List and official data analyzed by Oxfam. Since 2012, the number of those worth $5 million (P278.24 million) and above has increased by almost half (43.5 percent).
“It is quite disheartening to see many are dying due to lack of health care or are experiencing hunger amid high cost of food while the rich increased their wealth during the pandemic,” she added.
Geronimo pointed out that if a wealth tax were imposed on Filipino millionaires, the country could raise $3.8 billion a year. “This amount is enough to increase our health budget by two-fifths.”
‘Just the superyachts’
Bucher said, “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 doesn’t lift all ships —just the superyachts.”
According to Oxfam, billionaires have seen extraordinary increases in their wealth.
During the pandemic and cost-of-living crisis years since 2020, $26 trillion (63 percent) of all new wealth was captured by the richest 1 percent, while $16 trillion (37 percent) went to the rest of the world put together. A billionaire gained roughly $1.7 million for every $1 of new global wealth earned by a person in the bottom 90 percent. 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 10 years.
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 percent) 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 percent) in 2022 alone. Excess corporate profits have driven at least half of inflation in Australia, the US and the UK.
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 10 people on Earth—are going hungry. Women and girls often eat least and last, and make up nearly 60 percent of the world’s hungry population. The World Bank says we are likely seeing the biggest increase in global inequality and poverty since World War II. 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.
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.
“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.
Wealth tax
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 percent 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 urged 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, and 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.
Image credits: AP/Markus Schreiber