Still struggling with the pandemic, humanity must also deal with a soaring cost of living, an increasingly disrupted climate and widening inequalities. Meanwhile, the richest 1% has captured, since 2020, twice as much wealth as the remaining 99%. “It’s time to tax the rich,” concludes Oxfam. Not only to make them more involved, but to make them disappear.
“While ordinary people are making sacrifices every day on basic commodities, the ultra-rich are getting richer at an insane rate,” Léa Pelletier-Marcotte, political analyst at Oxfam-Québec, said last week ahead of the launch. , on Monday, of a fifty-page report entitled The law of the richest. “Taxing the ultra-rich and the exorbitant profits of big business is a realistic and necessary solution. We must stop believing that the prosperity of the most fortunate trickles down to the rest of the population. It’s a myth, it just doesn’t work. »
For ten years, the 1% of the richest on the planet has appropriated more than half of all the new wealth produced, reports the NGO in the portrait of inequalities that it updates each year on the eve of the World Economic Forum, the famous meeting place for the rich and influential in Davos, Switzerland. This trend has accelerated since 2020, with the 1% now capturing two-thirds of the new global wealth produced, six times more than the share that went to the poorest 90%. In other words, for every dollar of new global wealth that went into the pockets of nine out of ten humans, a billionaire earned $1.7 million.
The finances of large multinationals are also doing well. According to studies, the latest inflation surge is not primarily due to a supply and demand problem, but rather is the result of 54% (in the US), 59% (in the UK) and even 83% (in Spain) of companies’ decision to take advantage of it to increase their profit margins. Last year, 95 major food and energy companies doubled their profits and returned 84% of the sums accumulated (257 billion US dollars) to their shareholders, Oxfam calculated.
In Canada too
Canada is not immune to these trends, adds Oxfam-Québec. For every $100 of wealth created over the past ten years, $34 went into the pockets of the top 1%, while $5 went to Canadians in the bottom half. From the start of the COVID-19 pandemic to last November alone, Canadian billionaires have seen their wealth grow by 51%. Although they only represent 0.02% of the population, Canadians with more than $50 million in assets alone hold twice as much wealth as the poorest half of Canadians.
On the other hand, the ultra-rich and big corporations are less and less called upon to make their contribution when the time comes to distribute the wealth and devote part of it to the great collective missions of education, health care, development and maintenance of public infrastructure or even aid to the poorest.
Since 1980, the tax rates that apply to the incomes of the richest, their fortunes and corporate profits have all fallen. For every dollar collected in taxes, only 4¢ comes from wealth tax on the wealth. Anyway, half of the billionaires in the world live in countries that do not collect this kind of tax. This leads to situations where many of the richest men on the planet pay almost no tax, such as multi-billionaire Elon Musk, whose effective tax rate is said to be only 3.2%, or of his friend Jeff Bezos, whose rate would even be less than 1%.
In these circumstances, increasing taxes on wealthy people and businesses is “one of the most strategic tools” to fight inequality and combat the accumulation of various crises (polycrises), Oxfam believes.
Make Extreme Wealth Disappear
The NGO proposes in particular to introduce an “exceptional solidarity tax” on wealth and a tax “on exceptional profits” to put an end to this acceleration of enrichment in the midst of a crisis. We also call for a marginal tax rate of at least 60% on the income (against an average of 31% today) and capital gains (only 18% today) of the richest 1% , which would be a return to what has already been the norm in the last century. This rate should be increased to 75%, or even higher, for the “super-rich” to discourage the extravagant salaries paid to certain business leaders.
In Canada, an additional tax of 2% for millionaires, 3% for those with more than 50 million assets and 5% for billionaires would raise nearly 50 billion annually which could be used to increase spending by half. in education and to increase Canada’s official development assistance budget by 800%. The same kind of tax globally would bring in US$1.7 trillion a year, enough to lift 2 billion people out of poverty.
But it is not only a question of finding new sources of income in the pockets of the richest and of reducing inequalities. It is also about “directly reducing the number of wealthy people and their wealth, thereby creating more equal societies and preventing the emergence of powerful, uncontrolled and semi-aristocratic elites”, says the Oxfam report.
Because, “extreme concentrations of wealth undermine economic growth, corrupt politics and the media, undermine democracy, and foster political polarization.” In fact, “every billionaire is a political failure”