How can 26 people own the same as 3.8 billion people who make up the poorest half of humanity?
In their newly released report about inequalities, Oxfam observed that, since the 2008 crisis, the gap between the richest and poorest people has been increasing more rapidly. During this period, the number of billionaires has doubled, and their fortunes grow by $2.5bn a day. Meanwhile, the wealth of the poorest half of humanity, 3.8 billion people, fell by 11%.<
Wealth (exorbitant or not) is not an issue in itself as long as the rich consistently contribute to national effort. Otherwise, it fosters frustrations (that partially explain the “yellow vest” movement in France), and maintains a weak social mobility. Indeed, it cuts government revenues down and decreases its ability to support education, care and other public goods. Oxfam calculates that by getting the richest 1% to pay just 0.5% in additional taxes could raise more than enough of what it would cost to educate all the 262M children out of school and provide healthcare that would save the lives of 3.3 million people. Considering actual effective tax, there is room for such additional social tax. For example, in the UK (respectively Brazil), the top richest 10% of the population have an effective tax rate of 34% (21%) whereas the poorest 10% reach 49% (32%). In the meantime, rich people are hiding about $7.6 tn. This might explain some social upheavals.
Moreover, it seems corporates do not contribute fairly to national efforts, particularly as actual Corporate Income Tax Rates have been decreasing since the 1980s (from about 45% to 25%) due to increasing competition between countries, even in the same economic zone such the EU and due to tax evasion procedures. To tackle this situation, the French Minister for Economic Affairs and Finance, Bruno Le Maire is preparing a new tax based on turnover (not benefits) for GAFA-like (Google, Apple, Facebook and Amazon) corporates.
"Jeff Bezos, the founder of Amazon, is the richest man in the world, with a fortune of $112bn on the 2018 Forbes list. Just 1% of his total wealth is the equivalent of almost the whole health budget of Ethiopia, a country of 105 million people. He recently said that he has decided to invest his fortune in space travel, as he can’t think of anything else to spend his money on”. A detailed perusal of the Oxfam report might help him to find other way to spend money, as a person and as a CEO.
Emeric Nicolas, Head of Data Science