Richest 1% pocketed two-thirds of new wealth, prompts calls for taxes

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Oxfam has urged for quick action to address a post-Covid widening in global inequality after showing that the richest 1% have collected nearly two-thirds of the additional wealth amassed since the start of the pandemic.

The charity stated in a report released to coincide with the annual gathering of the global elite at the World Economic Forum in Davos that the wealthy had collected $26 trillion in new wealth up to the end of 2021. That accounted for 63% of total new wealth, with the remaining 99% of people receiving the remainder.

For the first time in a quarter-century, the rise in extreme wealth is being followed by an increase in extreme poverty, and it is calling for higher taxes on the super-rich, Oxfam reported.

Policies implemented to mitigate the economic impact of Covid 19 - such as interest rate cuts and the money creation process known as quantitative easing - increased the value of property and shares, which are typically owned by the wealthy.

According to the report, each billionaire received over $1.7 million for every $1 of additional global wealth earned by a person in the bottom 90% during the last two years. Despite minor declines in 2022, the aggregate fortune of billionaires climbed by $2.7 billion each day. The pandemic gains followed a decade in which the number and wealth of billionaires had surged.

On his account, Danny Sriskandarajah, the chief executive of Oxfam GB, stated that “the current economic reality is an affront to basic human values. Extreme poverty is increasing for the first time in 25 years and close to a billion people are going hungry but for billionaires, every day is a bonanza."

“Multiple crises have pushed millions to the brink while our leaders fail to grasp the nettle – governments must stop acting for the vested interests of the few," he added.

The chief executive further questioned, “How can we accept a system where the poorest people in many countries pay much higher tax rates than the super-rich? Governments must introduce higher taxes on the super-rich now.”

The report also highlighted that extreme wealth concentrations resulted in weaker growth, eroded democracy, and exacerbated political corruption. According to the organization, the super-rich were major contributors to the global issue, with a billionaire producing a million times more carbon than the typical person. 

The report urged countries to impose one-time wealth taxes on the top 1%, as well as windfall taxes, to curb profiteering amid the global cost of living crisis. As a result, rich-person taxes should be raised permanently, with higher rates for multimillionaires and billionaires.