Inequality crisis as world’s billionaires amass more wealth

By VINCENT OWINO

The world’s richest one percent pocketed at least $26 trillion, 63 percent of all new wealth created globally since 2020, even as the rest of the globe grapples with inflation, worsening income inequalities in the face of a worldwide economic recession, a new report suggests.

The Survival of the Richest Report released this week by international anti-poverty charity Oxfam shows that the wealth of the richest few will continue to skyrocket at the expense of the poor if governments do not curtail them through stringent tax measures.

According to the report, billionaires from across the globe have been amassing wealth worth $2.7 billion daily since 2020 even as the global Covid-19 pandemic hit economies hard, pushing many into extreme poverty.

Data shows that for every dollar gained by the poorest 90 percent of the globe’s population in the past two years, the wealthiest one percent earned $1.7 million, and out of every $100 of wealth created in the past two years, $63 went to the richest few.

Kenya’s richest individuals

In Kenya, Oxfam’s data shows that 130 richest individuals have more wealth than 33 million Kenyans combined, with the richest one percent accumulating seven times more wealth than the poorest 50 percent of the population between 2020 and 2021.

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This is against the backdrop of globally soaring food and energy prices, which has been worsened by the prolonged conflict in Eastern Europe, and a projected global recession that might affect at least a third of countries, according to the International Monetary Fund.

“Whole nations are facing bankruptcy, with debt payments ballooning out of control. The poorest countries are spending four times more repaying debts – often to predatory, rich, private lenders – than on healthcare,” Oxfam said in the report.

Oxfam argues that should the trend continue, many countries will implement spending cuts on pro-poor sectors like education and health, amounting to $7.8 trillion over the next five years.

Daily sacrifices

Gabriela Bucher, Oxfam’s executive director, said this decade could just be the best for billionaires if the trend stays, even as “ordinary people are making daily sacrifices on essentials like food.”

Speaking at the World Economic Forum in Davos, Switzerland, Ms Bucher said, “The tax system has been shifting over the past 40 years, to be on the shoulders of workers and the average citizen through VAT, and wealth is not taxed in the majority of contexts.”

To avert the ravages of a widening inequality gap, Oxfam is proposing wealth and income taxes of up to 60 percent on the globe’s richest, while reducing the tax burden borne by the poorest through value-added and income tax.

It recommends taxes on personal income, realised and unrealised capital gains, as well as levies on property, inheritance, and wealth.

“Taxing the super-rich and corporations is the door out of the 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,” Ms Bucher said.

Tax super-rich

In a statement on Monday, Oxfam called for “a systemic and wide-ranging increase in taxation of the super-rich to claw back crisis gains driven by public money and profiteering.”

“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,” Ms Bucher said.

Oxfam is not the first organisation to raise the alarm over the growing inequality levels in the world, however. Last October, the World Bank released a study showing that it will be unlikely to end extreme poverty by 2030 in the face of growing inequality.

The bank encouraged wealth taxes (property and carbon taxes) to help governments “mobilise domestic revenues without hurting the poor,” to ramp up efforts to eradicate extreme poverty.

So far, only Kenya has implemented anything close to that.

From the beginning of this year, Nairobi doubled its capital gains tax to 10 percent and the president has showed support for a wealth tax, going by his inaugural speech to parliament last year.

It appears extremely unlikely to end extreme poverty by 2030 in the face of growing inequality.

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