• Wednesday, June 19, 2024
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BusinessDay

Oxfam calls for tax revolt on super-rich to curb crisis windfall

Tax waivers fail to fix Nigeria’s drug crisis

Oxfam has called for a systemic and wide-ranging increase in taxation of the super-rich to claw back crisis gains driven by public money and profiteering.

In its latest report, the organisation said that decades of tax cuts for the richest and corporations have fueled inequality, with the poorest people in many countries paying higher tax rates than billionaires.

According to Oxfam, governments going forward should implement inheritance, property and land taxes, as well as net wealth taxes to reduce the numbers and wealth of the richest people.

“Elon Musk, one of the world’s richest men, paid a true tax rate of about 3 percent between 2014 and 2018. Aber Christine, a flour vendor in Uganda, makes $80 a month and pays a tax rate of 40 percent.

“Worldwide, only four cents in every tax dollar now comes from taxes on wealth. Half of the world’s billionaires live in countries with no inheritance tax for direct descendants. They will pass on a $5 trillion tax-free treasure chest to their heirs, more than the GDP of Africa, which will drive a future generation of aristocratic elites.

“Rich people’s income is mostly unearned, derived from returns on their assets, yet it is taxed on average at 18 percent, just over half as much as the average top tax rate on wages and salaries,” it stated.

The report shows that over the last forty years, governments across Africa, Asia, Europe, and the Americas have slashed the income tax rates on the richest. It stated that the same time, they have upped taxes on goods and services, which fall disproportionately on the poorest people and exacerbate gender inequality.

It stated that the richest 1 percent grabbed nearly two-thirds of all new wealth worth $42 trillion created since 2020. This according to the report is almost twice as much money as the bottom 99 percent of the world’s population.

Permanently increase taxes on the richest 1 percent, xto at least 60 percent of their income from labor and capital, with higher rates for multi-millionaires and billionaires. Governments must especially raise taxes on capital gains, which are subject to lower tax rates than other forms of income.

Commenting on the report, Gabriela Bucher, executive director of Oxfam International said, “while ordinary people are making daily sacrifices on essentials like food, the super-rich have outdone even their wildest dreams. Just two years in, this decade is shaping up to be the best yet for billionaires —a roaring ‘20s boom for the world’s richest.

“Taxing the super-rich and big corporations is the door out of today’s overlapping crises. It’s time we demolish the convenient myth that tax cuts for the richest result in their wealth somehow ‘trickling down’ to everyone else. Forty years of tax cuts for the super-rich have shown that a rising tide doesn’t lift all ships —just the superyachts.”

“During the past decade, the richest 1 percent had captured around half of all new wealth.

“In the years after WW2, the top US federal income tax rate remained above 90 percent and averaged 81 percent between 1944 and 1981. Similar levels of tax in other rich countries existed during some of the most successful years of their economic development and played a key role in expanding access to public services like education and healthcare.

“Taxing the super-rich is the strategic precondition to reducing inequality and resuscitating democracy. We need to do this for innovation. For stronger public services. For happier and healthier societies. And to tackle the climate crisis, by investing in the solutions that counter the insane emissions of the very richest,” said Bucher.