The richest 1 percent are about to control a majority of the world’s wealth.
That’s according to anti-poverty charity Oxfam, which said the slice of global wealth held by the world’s most affluent reached 48 percent last year, up from 44 percent in 2009. Their share will likely exceed 50 percent by 2016, Oxfam said in a letter addressed to attendees of the World Economic Forum in Davos, Switzerland, this week.
“The scale of global inequality is quite simply staggering,” Winnie Byanyima, Oxfam’s executive director, said in the statement. “The gap between the richest and the rest is widening fast.” The world’s richest added $92 billion to their collective fortune in 2014, according to the Bloomberg Billionaires Index. The biggest gainer was Jack Ma, the co-founder of China’s e-commerce company Alibaba Group Holding Ltd. U.S. billionaires Warren Buffett and Mark Zuckerberg are also among the top gainers, the index show.
As the wealth gap widens, governments from U.S. to China are proposing new taxes on their most affluent citizens. More than a billion people live on less than $1.25 a day, according to Oxfam.
President Barack Obama plans to limit profits Americans make from investments and impose capital-gain taxes on inherited assets. Beijing’s tax officials recently started asking citizens to report their earnings overseas, according to the New York Times.
One-fifth of global billionaires “have interests in the financial and insurance sectors” and saw their cash wealth climb 11 percent in the past year, Oxfam said. The Oxfam study uses data from Credit Suisse’s global wealth report and Forbes. “Oxfam is concerned that the lobbying power of these sectors is a major barrier in the way of reforming the global tax system,” according to the statement. The group proposes a crackdown on corporate and individual tax dodging, more investment in free public services, and a shift in taxes toward capital and wealth to help fix the problem.
Obama wants to increase top tax rate on capital gains and dividends to 28 percent from 23.8 percent. The rate was 15 percent when he took office in 2009. He would also impose capital-gains taxes on asset transfers at death, ending what the White House calls “the largest capital gains loophole.”
Chinese tax agencies have quietly started to enforce the regulation which would require citizens and companies to pay taxes on their global income, the New York Times reported earlier this month. New rules effective Feb. 1 will ban international investments deemed to be tax shelters, according to the report.
