Billionaire wealth soared in 2022 as one in 10 go hungry
Super-rich people bagged £42trn in new wealth created since 2020, which is nearly twice as much money as 99% of the world’s population.
Over the past decade, this group have gained around half of all new wealth, according to Oxfam.
It said extreme poverty and extreme wealth have increased simultaneously for the first time in 25 years as it noted $26trn (63%) of all new wealth was captured by the richest 1%.
Meanwhile, roughly one in ten people on earth are going hungry. Women and girls often eat least and last, and make up nearly 60% of the world’s hungry population.
Its Survival of the Richest report comes on the opening day of the World Economic Forum in Davos, Switzerland, where it also revealed that a billionaire gained roughly $1.7m for every $1 of new global wealth earned by a person in the bottom 90%.
In fact, billionaire wealth has increased by $2.7bn a day, with the number of billionaires doubling over the past decade.
Oxfam said billionaire wealth had surged in 2022 with rapidly rising food and energy prices, with 95 corporations in this sector more than doubling their profits. As an example, the Walton dynasty, which owns half of Walmart, received $8.5bn over the past year, while Indian billionaire Gautam Adani, owner of major energy corporations saw his wealth soar by £42bn (46%) in 2022, Oxfam claims.
It suggests these excess corporate profits have driven at least half of inflation in the UK, US and Australia.
Meanwhile, 1.7 billion workers live in countries where inflation is outpacing wages, with 820 million going hungry, entire countries facing bankruptcy and the poorest countries spending four times more repaying debts to rich creditors than on healthcare.
All this means three-quarters of the world’s governments are planning austerity-driven public sector spending cuts, including on healthcare and education, to the tune of $7.8trn over the next five years.
‘Tax the super-rich’
Oxfam is calling for a “systemic and wide-ranging” increase in taxation of the super-rich, saying that decades of tax cuts for the richest and corporations have fueled inequality.
Gabriela Bucher, executive director of Oxfam International, said: “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.
“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.”
It noted Elon Musk, one of the world’s richest men, paying a “true tax rate” of about 3% between 2014 and 2018. Meanwhile, Aber Christine, a flour vendor in Uganda, makes $80 a month and pays a tax rate of 40%.
Oxfam said that worldwide, only four cents in every tax dollar now comes from taxes on wealth. Half of the world’s billionaires live in countries with no inheritance tax for direct descendants. They will pass on a $5trn tax-free treasure chest to their heirs, more than the GDP of Africa.
Further, it said rich people’s income is mostly unearned, derived from returns on their assets, yet it is taxed on average at 18%, just over half as much as the average top tax rate on wages and salaries.
Meanwhile, its report also suggested that taxes on the wealthiest used to be higher but these have been slashed over the past 40 years across Africa, Asia, Europe and the Americas.
At the same time, taxes on goods and services have increased, thereby disproportionately affecting the poorest people.
An up to 5% wealth tax on multi-millionaires and billionaires could raise $1.7trn a year – enough to lift two billion people out of poverty.
Oxfam is calling on governments to:
- Introduce one-off solidarity wealth taxes and windfall taxes
- Permanently increase taxes on the richest 1%, for example to at least 60% of their income from labour and capital, with higher rates for multi-millionaires and billionaires. It also wants to see Governments raise taxes on Capital Gains, which are subject to lower tax rates than other forms of income.
- Tax the wealth of the richest 1% 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.
Bucher added: “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.”