Billionaire fortunes grew by US$2.5 billion a day last year as poorest saw their wealth fall – new Oxfam report
Billionaire fortunes increased by 12 per cent last year – or US$2.5 billion a day - while the 3.8 billion people who make up the poorest half of humanity saw their wealth decline by 11 per cent, reveals a new report from Oxfam today. The report is being launched as political and business leaders gather for the World Economic Forum in Davos, Switzerland.
‘Public Good or Private Wealth’ shows the growing gap between rich and poor is undermining the fight against poverty, damaging our economies and fueling public anger across the globe. It reveals how governments are exacerbating inequality by underfunding public services, such as healthcare and education, on the one hand, while under taxing corporations and the wealthy, and failing to clamp down on tax dodging, on the other. It also finds that women and girls are hardest hit by rising economic inequality.
Winnie Byanyima, Executive Director of Oxfam International, said:
‘The size of your bank account should not dictate how many years your children spend in school, or how long you live – yet this is the reality in too many countries across the globe. While corporations and the super-rich enjoy low tax bills, millions of girls are denied a decent education and women are dying for lack of maternity care.’
The report reveals that the number of billionaires has almost doubled since the financial crisis, with a new billionaire created every two days between 2017 and 2018, yet wealthy individuals and corporations are paying lower rates of tax than they have in decades.
- Getting the richest one per cent to pay just 0.5 per cent extra tax on their wealth could raise more money than it would cost to educate the 262 million children out of school and provide healthcare that would save the lives of 3.3 million people.
- Just four cents in every dollar of tax revenue collected globally came from taxes on wealth such as inheritance or property in 2015. These types of tax have been reduced or eliminated in many rich countries and are barely implemented in the developing world.
- Tax rates for wealthy individuals and corporations have also been cut dramatically. For example, the top rate of personal income tax in rich countries fell from 62 per cent in 1970 to just 38 per cent in 2013. The average rate in poor countries is just 28 per cent.
- In some countries, such as Brazil, the poorest 10 per cent of society are now paying a higher proportion of their incomes in tax than the richest 10 per cent.
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At the same time, public services are suffering from chronic underfunding or being outsourced to private companies that exclude the poorest people. In many countries a decent education or quality healthcare has become a luxury only the rich can afford. Every day 10,000 people die because they lack access to affordable healthcare. In developing countries, a child from a poor family is twice as likely to die before the age of five than a child from a rich family. In countries like Kenya a child from a rich family will spend twice as long in education as one from a poor family.
Cutting taxes on wealth predominantly benefits men who own 50 per cent more wealth than women globally, and control over 86 per cent of corporations. Conversely, when public services are neglected poor women and girls suffer most. Girls are pulled out of school first when the money isn’t available to pay fees, and women clock up hours of unpaid work looking after sick relatives when healthcare systems fail. Oxfam estimates that if all the unpaid care work carried out by women across the globe was done by a single company it would have an annual turnover of US$10 trillion – 43 times that of Apple, the world’s biggest company.
‘People across the globe are angry and frustrated. Governments must now deliver real change by ensuring corporations and wealthy individuals pay their fair share of tax and investing this money in free healthcare and education that meets the needs of everyone – including women and girls whose needs are so often overlooked. Governments can build a brighter future for everyone – not just a privileged few,’ added Byanyima.
‘Public Good or Private Wealth’ and a methodology document that outlines how Oxfamarrived at the key statistics in the report, is available for download:
Oxfam’s calculations are based on the most up to date, comprehensive data sources available. Figures on the share of wealth owned by the poorest half of humanity come from Credit Suisse Wealth Databook and relate to the period June 2017 - June 2018. Figures on the very richest in society are based on more detailed data from the Annual Forbes ‘Billionaires List’ and relates to the period March 2017 - March 2018.
Barbara's story tells how inequality hurts
'Those who are suffering continue to suffer, because PEOPLE are selfish.”
(Photo: Abbie Trayler-Smith/Oxfam)
Barbara is from Zambia – one of the top ten fastest growing economies in the world. But like 64% of the country, Barbara lives in extreme poverty. She lost her husband to cancer, and had to sell livestock to pay for his treatment. She has to walk four hours every day to collect water for her crops, and her son doesn’t go to school because she can’t afford the registration fees. Countries like Zambia are losing vital tax revenue which could pay for better health centres, schools and roads because multinational companies can hide vast profits in the secret global network of tax havens.