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The last decade has been very lucrative for the world’s super-rich residents, fueling the drive by some advocates to tax them more.
The top 1% has seen its wealth soar by $42 trillion over the past decade, according to a new analysis by Oxfam International, which is being released ahead of the G20 finance ministers and central bank governors’ meeting in Brazil. That’s nearly 34 times more than the bottom 50% of global population.
The average net worth of the elite jumped by nearly $400,000 per person, after adjusting for inflation, compared to $335 for the bottom half of residents.
“Inequality has reached obscene levels, and until now governments have failed to protect people and planet from its catastrophic effects,” said Max Lawson, Oxfam International’s head of inequality policy. “The richest one percent of humanity continues to fill their pockets while the rest are left to scrap for crumbs.”
Oxfam regularly issues reports highlighting global inequality and pushes for changes to start evening the playing field. The latest analysis comes as the advocacy group, along with several partners, is calling on G20 leaders to hike taxes on the ultra-rich.
As part of its G20 presidency, the Brazilian government recently commissioned a study on raising taxes on the wealthy. The report, prepared by French economist and inequality expert Gabriel Zucman, found that a 2% minimum tax on global billionaires’ wealth would yield between $200 billion and $250 billion from about 3,000 taxpayers annually.
According to the EU Tax Observatory, which is run by Zucman, the super-rich in big countries pay a far smaller share of their income in taxes than ordinary people. Plus, their wealth is taxed at effective rates of just 0%-0.5%.
“Momentum to increase taxes on the super-rich is undeniable, and this week is the first real litmus test for G20 governments. Do they have the political will to strike a global standard that puts the needs of the many before the greed of an elite few?” Lawson said.
Finance officials from the world’s biggest countries began talks earlier this year on introducing a global minimum tax on billionaires. However, getting an agreement among the G20 leaders will be difficult and could take a long time. Such a tax would also be complicated to implement.
