Inequalities in the world | Make the rich pay, Oxfam demands

Poverty is gaining ground in the world, the first in more than a quarter of a century, denounces Oxfam in a report published on Monday. To reduce inequalities, we must tax the rich more, claims the organization on the eve of the World Economic Forum in Davos, Switzerland.

Poverty is known: why present it to us as something new?

Because it is: for the first time in 30 years, extreme poverty has worsened, the World Bank revealed last October. From 1990 to 2019, the proportion of the population forced to survive on less than $2.15 a day had declined significantly, from 38% to 8.4%. Except that in 2020, it went up to 9.3%, or 719 million people. They were slightly fewer at the end of 2022 (685 million), but still more than in 2019 (648 million).

Alright, but with the pandemic and inflation, everyone got the hang of it, right?

Not the richest! “Even though the fortunes of billionaires have declined slightly since the peak of 2021, they are still several trillions of dollars higher than before the pandemic,” notes Oxfam, citing the list of billionaires from Forbes. In 2022, nearly 13,000 billion US were thus concentrated in the hands of less than 2,700 individuals. “Every billionaire is a political failure,” says Oxfam.

So the solution would be political?

This is what Oxfam pleads. Taxing the rich and corporations more should be done, the body says, and the concentration of billionaires’ wealth should be halved by 2030. “This could avoid austerity and combat inflation and poverty.” rising prices, and preventing the unnecessary cruelty of large-scale poverty and hunger,” its report suggests.

And taxing the rich, does it work?

It depends. “When the Trudeau government was elected in 2015, it raised taxes on the wealthy by four percentage points. But we realized that the receipts were not there the first year because the wealthiest are doing tax planning, “recalls the holder of the research chair in taxation and public finance (CFFP) of the University of Sherbrooke, Luc Godbout.

On the other hand, it was long believed that the combined rate applied to the highest income bracket could not exceed the psychological threshold of 50% in Quebec. With the federal increase, it climbed to 53.3% “and no disaster happened,” notes Mr. Godbout.

That said, even if the rate applied to the wealthiest is 53.3%, Statistics Canada data show that “the rate actually paid is 30%”, underlines tax expert Brigitte Alepin. She therefore finds it encouraging that Ottawa wants to review the minimum tax for individuals to ensure that they pay their fair share. “Is the whole tax system going to be restored overnight? Probably not, but I don’t think they’re doing this in order not to improve the situation. »

So we could easily raise taxes?

It’s not that obvious. In Quebec, the weight of personal and corporate income taxes, like that of payroll taxes and corporate capital taxes, is already the highest of all Canadian provinces, shows the brand new Assessment of taxation in Québec, published by the CFFP on Friday. “Perhaps we are already using our cartridges,” slips Mr. Godbout.

As for the wealth tax, it is less and less popular in the advanced economies of the OECD (Organization for Economic Co-operation and Development), notes the Balance sheet of CFFP.

Of the 11 countries that levied a net wealth tax on individuals in 1982, only four remain. And in the majority of cases, revenues represent less than 0.5% of their GDP. “Perhaps over time, they said to themselves that for all the effort and all the irritants that it represents, they gave up,” says Mr. Godbout.

Are there any encouraging signs?

And how ! By the end of 2021, more than 135 countries and states have backed the idea of ​​a global minimum tax (IMM), so that large multinationals will be subject to a minimum tax rate, in principle 15%. “Thirty years after globalization, we have agreed to take the last necessary steps, which is to deal with international tax competition. It puts a floor to this competition, ”rejoices tax specialist Brigitte Alepin.

Originally announced for 2023, this minimum tax is likely to be delayed until 2024 or 2025. years or 30 years. It’s on the radar for the next few months and years, ”says M^me Aleppo. “I am optimistic because in the context and with the prospect of a recession, the pressures to implement a fair share of taxes will be such as the politicians will demand it. »