Oxfam: The richest 1% have gained almost twice as much new wealth as the rest of the world in the past two years

New York

Over the past two years, the world’s wealthiest residents have gotten richer than anyone else, and much faster.

The top 1 percent gained almost twice as much new wealth as the rest of the world during that period, according to Oxfam’s annual inequality report released on Sunday. Their wealth soared by $26 trillion, while the net worth of the bottom 99% increased by only $16 trillion.

The wealth accumulation of the ultra-wealthy has accelerated during the pandemic. Looking back over the past decade, they captured only half of all new wealth created, compared with two-thirds in the past few years.

The report, which draws on data compiled by Forbes, coincides with the opening of the annual World Economic Forum meeting in Davos, Switzerland, an elite gathering of some of the wealthiest people and world leaders.

Meanwhile, many less fortunate people are struggling. Some 1.7 billion workers live in countries where inflation exceeds wages. Poverty reduction efforts likely stalled last year after a surge in global poverty in 2020.

Gabriela Bucher, executive director of Oxfam International, said: “While ordinary people make daily sacrifices for necessities like food, the ultra-rich are living out even their wildest dreams.” Two years on, this decade is shaping up to be the best decade yet for billionaires — a boom time for the world’s richest 20s.”

While their fortunes have declined over the past year, the wealth of the world’s billionaires remains far higher than it was at the start of the pandemic.

Their combined net worth is $11.9 trillion, according to Oxfam. While that’s nearly $2 trillion less than at the end of 2021, it’s still well above the March 2020 figure of $8.6 trillion for billionaires.

The wealthy are benefiting from three trends, said Nabil Ahmed, director of economic justice at Oxfam America.

At the onset of the pandemic, governments around the world, especially wealthier countries, pumped trillions of dollars into their economies to prevent collapse. That sent the value of stocks and other assets soaring.

“So much of the new cash ends up going to the ultra-wealthy, who were able to ride the stock market surge and asset boom,” Ahmed said. “And the guardrails of fair taxation aren’t in place.”

Also, many companies have done very well in recent years. Profits of some 95 food and energy companies will more than double in 2022 as inflation drives up prices, Oxfam said. Most of that money was paid out to shareholders.

In addition, the long-term trends of dismantling workers’ rights and increasing market concentration are exacerbating inequality.

In contrast, global poverty increased sharply in the early days of the pandemic. While some progress has been made in reducing poverty since then, it is expected to stall until 2022, partly because of high food and energy prices exacerbated by the war in Ukraine, according to World Bank data cited by Oxfam.

Oxfam said it was the first time in 25 years that extreme wealth and extreme poverty had increased simultaneously.

In response to this growing inequality, Oxfam is calling on governments to raise taxes on the wealthiest residents.

It proposes introducing a one-off wealth and windfall profits tax to end windfall profiteering in the global crisis and permanently raising taxes on the richest 1% of residents to at least 60% of their labor and capital income.

Oxfam argues that tax rates for the top 1% should be high enough to significantly reduce their numbers and wealth. Funds should then be reallocated.

“We do have an extreme crisis of wealth concentration,” Ahmed said. “I think it’s first and foremost important to recognize that this is not inevitable. A strategic prerequisite for curbing extreme inequality is taxing the super-rich.”

However, the group faces an uphill battle. Some 11 countries are cutting taxes on the wealthy during the pandemic. Efforts to raise taxes on the wealthy have failed in the 2021 U.S. Congress despite Democrats controlling both houses of Congress and the White House.

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