Oxfam calls for windfall tax as 99% of world population takes a pay cut while top 10 incomes grow by $1bn a day
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The 10 richest men in the world have seen their global wealth double to $1.5tn (£1.01tn) since the start of the global pandemic following a surge in share and property prices that has widened the gap between rich and poor, according to a report from Oxfam.
Urging governments to impose a one-off 99% wealth tax on Covid-19 windfall gains, the charity said World Bank figures showed163 million more people had been driven below the poverty line while the super-rich were benefiting from the stimulus provided by governments around the world to mitigate the impact of the virus.
Oxfam projects that by 2030, 3.3 billion people will be living on less than $5.50 per day.
The charity said the incomes of 99% of the world’s population had reduced from March 2020 to October 2021, when Elon Musk, the founder of the electric car company Tesla, and the other nine richest billionaires had been collectively growing wealthier by $1.3bn a day.
Musk, according to figures taken from Forbes magazine’s billionaires list, saw his wealth increase 10-fold to $294bn in the first 20 months of the pandemic, catapulting him above Jeff Bezos, the founder of Amazon, to be the world’s richest person.
During a period when technology stocks were soaring on Wall Street, Bezos’s net wealth rose 67% to $203bn, Facebook’s Mark Zuckerberg’s wealth doubled to $118bn, while the wealth of the founder of Microsoft, Bill Gates, increased by 31% to $137bn.
The charity urged governments to levy taxes on capital and wealth in a report – Inequality Kills – intended to coincide with the now-postponed gathering of the global elite at the World Economic Forum in Davos.
Oxfam said a one-off 99% windfall tax on the Covid wealth gains of the 10 richest men could pay for enough jabs to vaccinate the entire world and provide the resources to tackle climate change, provide universal healthcare and social protection, and address gender-based violence in 80 countries. Even after a 99% levy, the top 10 billionaires would be $8bn better off between them than they were before the pandemic, the charity said.
Danny Sriskandarajah, the Oxfam GB chief executive said: “The explosion in billionaires’ fortunes at a time when poverty is increasing lays bare the fundamental flaws in our economies. Even during a global crisis our unfair economic systems manage to deliver eye-watering windfalls for the wealthiest but fail to protect the poorest. It is an avoidable tragedy that every day people die because they lack essentials such as food and healthcare.
“Today’s generation of leaders can start to right these wrongs by implementing progressive taxes on capital and wealth and deploying that revenue to save lives and invest in our future. They should make sure that Covid-19’s long-term legacy is quality universal healthcare and social protection for all. Governments have an historic opportunity to back bold economic plans based on greater equality that change the deadly course we are on.”
Share prices fell sharply in the early weeks of the pandemic but were then boosted by the stimulus provided by central banks and finance ministries around the world. Cuts in interest rates to record low levels and massive increases in the supply of money through the bond-buying process known as quantitative easing sent stock markets soaring, with technology companies such as Amazon, Google, Apple and Facebook boosted by an increase in working from home and online shopping during the pandemic.
While people on more modest incomes have also seen their assets rise in value during the pandemic, Oxfam said the 10 richest men own six times as much wealth as the bottom 40% (3.1 billion people). It would take the 10 billionaires 414 years to spend their combined wealth at a rate of a million dollars each per day, the charity added.
The threat posed by inequality was highlighted last week by David Malpass, the president of the World Bank, when he announced his organisation’s latest forecasts for the global economy.
“Developing countries are facing severe long-term problems related to lower vaccination rates, global macro policies and the debt burden,” he said.
“There’s a growing canyon between their growth rates and those in advanced economies. This inequality is even more dramatic in per capita and median income terms, with people in the developing world left behind and poverty rates rising. We’re seeing troubling reversals in poverty, nutrition and health”
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