BILLIONAIRES including Amazon’s Jeff Bezos and Tesla founder Elon Musk have seen their wealth soar during the COVID-19 pandemic while the world’s poor face years of hardship, charity Oxfam said on Monday as it demanded steps to tackle inequality.
Nations have a “shrinking window of opportunity” to build a fair, green recovery, according to “The Inequality Virus” report, published as global leaders tune in for the World Economic Forum’s virtual “Davos Dialogue” meeting.
COVID-19 has unleashed an economic storm that hit the poor and vulnerable hardest, with women and marginalised workers facing the worst of job losses and the World Bank warning more than 100 million people could be pushed into extreme poverty. It could take more than a decade to reduce the number of people living in poverty back to pre-crisis levels, Oxfam said.
Meanwhile, the collective wealth of the world’s billionaires rose $3.9 trillion between March and December 2020 to reach $11.95 trillion, the report calculated. The 10 richest men – a list led by Bezos and Musk which also includes LVMH luxury group’s CEO Bernard Arnault, Microsoft’s Bill Gates and Facebook CEO Mark Zuckerberg — saw their net worth increase by $540 billion in the same period, Oxfam said.
It is quite obvious that taxes in the US are disproportionately rigged in favour of the rich. That’s why even a temporary tax on excess profits made by the 32 global corporations that have profited the most during the pandemic could have raised $104 billion in 2020, but no nation would be able to implement it without the approval of the US.
That’s why in 2018, for the first time in fifty years, the average effective tax rate paid by the richest 400 families in the country was 23 percent, a full percentage point lower than the 24.2 percent rate paid by the bottom half of American households.
The relatively small tax burden of the super rich is the product of decades of choices – some deliberate, others the result of indecisiveness or inertia – made by American lawmakers. Congress has repeatedly slashed top income rates, for instance, and cut taxes on capital gains and estates. Lawmakers also have failed to provide adequate funding for IRS enforcement efforts and allowed multinational companies to shelter their profits in low tax havens.
The administration of new U.S. President Joe Biden will spur “more willingness” for joint action on issues including a crackdown on tax havens and a bailout for developing nations, but exactly how far and fast this will fold out is yet to be seen. The US — if it wants to, could easily take in billions of dollars in taxes from big corporations but is yet reluctant to use its might to force companies from going offshore to reduce their taxes.
