Rising economic inequality spurs calls to tax the rich

A chorus of economists and numerous millionaires are amplifying their demands for governments to levy taxes on the world’s wealthiest individuals, citing an imminent “economic, ecological, and human rights disaster” stemming from escalating wealth inequality.

The resounding call was made in an open letter signed by over 300 prominent figures ahead of the Group of 20 (G20) summit, which brings together the world’s richest nations. The summit, held in New Delhi from Saturday to Monday, is witnessing a robust debate on the urgent need to address this growing issue.

In the missive addressed to G20 leaders, millionaires, politicians, and economists stressed that the skyrocketing wealth accumulation by a select few poses a global threat to political stability. They called for immediate action to curb this alarming trend.

According to data from Oxfam International, a global poverty alleviation organisation, billionaires have seen their wealth surge by a staggering 109 percent over the past decade, soaring from $5.6 trillion to a colossal $11.8 trillion. The report highlights that these fortunes collectively swell by an astonishing $2.7 billion every day.

The sobering statistics presented in the 2022 World Inequality Report reveal that the top 10 percent of the world’s wealthiest individuals own a staggering 76 percent of the planet’s wealth, while the bottom 50 percent of the global population holds a meagre 2 percent.

The letter’s signatories were unequivocal in their message: “Such alarming levels of inequality undermine the stability of virtually every global system and demand immediate attention.”

Critics argue that government policies worldwide have disproportionately favoured the wealthy and the financial sector while neglecting the interests of the working class.

A report by Oxfam suggests that implementing a 5 percent tax on the ultra-rich could yield a staggering $1.7 trillion annually, sufficient to lift two billion people out of poverty.

Even a more modest tax rate of 3 to 4 percent could generate substantial revenues, given the extreme concentration of wealth and its rapid growth in recent years, emphasised economist Jayati Ghosh, a signatory of the Tax Extreme Wealth letter.

“In India, for instance, a 4 percent tax on dollar billionaires, which amount to less than 1,000 families, would generate revenues equivalent to 1 percent of GDP—equivalent to the combined public health spending by central and state governments,” Ghosh noted in an interview with Al Jazeera.

However, the primary impediment to implementing a global tax system for the super-rich remains political in nature, Ghosh acknowledged.

Prominent business figure Frank Stronach, founder of the multinational company Magna International Inc. operating in 29 countries, has proposed a distinctive “corporate constitution” aimed at sharing profits among employees. Writing in Canada’s National Post newspaper, Stronach also advocated for nations to establish an “economic charter of rights” as a strategic response to the deepening issue of wealth inequality.

“With an economic charter of rights, companies employing more than 300 workers would be mandated to allocate 20 percent of their annual profits to employees,” Stronach asserted. “A country embracing such an economic charter would foster a far more equitable and broadly distributed distribution of wealth than any previously existing system. The acute concentration of wealth in the hands of a select few invariably results in economic dominance. We must break free from those shackles.”

As the global debate on wealth inequality intensifies, calls for meaningful action to address this issue are becoming increasingly urgent, with discussions at the G20 summit likely to reverberate across international financial circles.

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