For every dollar of new global wealth earned by a person in the bottom 90% during the first two years of the COVID-19 pandemic, a billionaire got $1.7 million, according to a new analysis from the anti-poverty group Oxfam.
That means that even in an era marked by the pandemic, nearly 15 million excess deaths and rising consumer prices, the richest 1% captured almost two-thirds of all new wealth created between December 2019 and December 2021, the report said.
Oxfam said a “flood of public money pumped into the economy by rich countries” during the pandemic, combined with tax policies that favor the wealthy, higher corporate profits and rising prices, helped to fuel a surge in wealth for the world’s richest people. To reverse a trend of widening inequality, taxes must be raised on the richest people in the world, the organization said.
“Although billionaire fortunes have fallen slightly since their peak in 2021, they remain trillions of dollars higher than before the pandemic,” Oxfam said in its report. “This crisis-driven bonanza for the super-rich has come on top of many years of dramatically growing fortunes at the top, and growing wealth inequality.”
The organization released its report as the world’s elite descend on Davos, Switzerland, for the World Economic Forum annual meeting.
“It’s not been hard to find a world leader who has something to say about extreme inequality, but it’s been really, really hard to find any of them doing something about it,” Nabil Ahmed, Oxfam America’s director of economic justice, told MarketWatch. “We’ve really lost a decade to lip service about inequality, and the extraordinary rise in extreme inequality over the past decade — but especially over this pandemic period — reflects that lost opportunity to act.”
Oxfam, which relied on data from Credit Suisse’s global wealth report, as well as Forbes’ Billionaires List and Forbes’ Real-Time Billionaires List, for its report, found that over the past 10 years, the world’s richest 1% nabbed more than half of all new global wealth, with their share of global wealth only accelerating further during the pandemic.
“Oxfam believes that, as a starting point, the world should aim to halve the wealth and number of billionaires between now and 2030, both by increasing taxes on the top 1% and adopting other billionaire-busting policies,” the report said. “This would bring billionaire wealth and numbers back to where they were just a decade ago in 2012.”
A tax of up to 5% on the world’s richest people could amount to $1.7 trillion a year, Oxfam said.
“‘It’s not been hard to find a world leader who has something to say about extreme inequality, but it’s been really, really hard to find any of them doing something about it.’”
— Nabil Ahmed, Oxfam America’s director of economic justice
To effectively tax the wealthy, Oxfam urged, among other measures, a quadrupling of tax rates on capital gains, saying countries “must ensure that they tax gains from capital at least as much, and preferably more, than income from work.”
Currently, tax rates for capital gains are 18% on average across more than 100 countries, Oxfam said.
There has similarly been a “great erosion” of top marginal income tax rates and corporate tax rates, Ahmed noted.
Some countries are taking action, though. José Antonio Ocampo, the minister of finance and public credit in Colombia, wrote in Oxfam’s report that his country is implementing reforms to tax the wealthy, and corporations.
“Taxing the wealthiest is no longer an option — it’s a must,” he said. “Global inequality has exploded, and there is no better way to tackle inequality than by redistributing wealth.”
Last year’s Inflation Reduction Act in the U.S. also brought about a 15% minimum corporate tax rate, Ahmed noted, and “we’ve seen certainly the kind of discussion here in the U.S. to get us to a more progressive place,” even if it hasn’t gone far enough quite yet.
Meanwhile, President Joe Biden last year endorsed a “billionaire minimum income tax” on the full incomes of the ultra-wealthy, including on unrealized gains, which would require the top 0.01% of earners to pay at least 20% in taxes. In 2021, Democrats pushed a similar wealth tax as a means of funding Biden’s Build Back Better agenda.
Opponents of those initiatives have said the proposed taxes, apart from potentially being unconstitutional, would be complicated and costly. A handful of billionaires have also publicly pushed back on Democratic proposals to slap new taxes on the wealthy in recent years.
The efforts gained momentum after a 2021 ProPublica report found that some of the wealthiest people in the U.S., including Jeff Bezos, Michael Bloomberg, Carl Icahn and George Soros, had at times paid nothing in federal income tax, with the investigative news outlet noting their rising gains from stock and property holdings weren’t considered taxable income until they were sold.
ProPublica reported that Bloomberg and Icahn said they paid what they legally owed in taxes, while a spokesperson for Soros said he had lost money on investments between 2016 and 2018, which meant he didn’t owe federal income tax. The publication said Bezos’s representatives “declined to receive detailed questions about the matter.”
Still, not much has changed — at least so far.
“Previous moments of global crisis have seen increases in taxation of the richest, in the spirit of solidarity,” Oxfam said. “Disappointingly, this did not happen during the peak of the pandemic. Instead, 95% of countries either did not increase, or even lowered, taxes on rich people and corporations.”
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