Business & Economy

Tax super-rich at 75% to combat unprecedented polycrisis, Oxfam urges

Davos, Switzerland, Jan 16 (EFE).- A tax rate of at least 75 percent should be imposed on the world’s super-rich to reduce growing inequality and combat the effects of the unprecedented “polycrisis” of inflation, hunger, poverty, effects of the Covid-19 pandemic and climate-related disasters, the NGO Oxfam urged in a report Monday.

The document published at the start of the World Economic Forum in Davos highlights that since the start of the pandemic, the richest 1 percent of the global population has accounted for almost two-thirds of all new wealth, almost double that of the remaining 99 percent.

Oxfam calculated that the fortunes of billionaires are increasing by $2.7 billion each day, even as inflation outpaces the wages of at least 1.7 billion workers.

Last year, energy and food companies more than doubled their profits and distributed $257,000 billion in dividends to their shareholders, “while over 800 million people went to bed hungry,” the NGO said.

According to the study, three quarters of governments plan to cut spending over the next five years, totalling around $7.8 trillion.

“Together with the Institute for Policy Studies, the Patriotic Millionaires and the Fight Inequality Alliance, Oxfam has used data from Wealth-X and Forbes to calculate that a wealth tax of 2% on the world’s millionaires, 3% on those with wealth above $50m, and 5% on the world’s billionaires would raise $1.7 trillion dollars annually,” the report said.

“This would be enough to lift 2 billion people out of poverty. In addition, it could fill the funding gap for emergency UN humanitarian appeals and fund a global plan to end hunger.”

Currently, across 100 countries the average personal income tax rate is around 31 percent, Oxfam said, with the capital gains rate across 123 countries only 18 percent on average, compared to when “marginal tax rates of 60% and above on personal income of the rich [which] were the norm for large parts of the 20th century.”

Oxfam maintains that for the super-rich – those with multi-million or billion-dollar fortunes – tax rates should be at least 75 percent “to discourage sky-high executive pay.”

The NGO defends that if governments aspire to comprehensively tax income, “they must ensure that they tax gains from capital at least as much, and preferably more, than income from work.”

“Income from capital is, in most countries, the most important source of income for the rich, and in most jurisdictions it is currently taxed at much lower rates than income from work,” it said. EFE


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