62 people own the same wealth as half the world. Here’s why that’s bad.
We live in a world where just 62 individuals have as much wealth as the 3.6 billion poorest people, a figure that has fallen from 388 five years ago. Such runaway inequality is bad for all of us, but it’s the poorest among us who suffer the most.
Our latest research report published in January ahead of the annual gathering of the world’s financial and political elites in Davos, outlines how the wealth of the poorest half of the world’s population continues to fall, while the wealth of the richest grows. Extreme inequality is the result of a skewed economic and political system that favors the few at the expense of everyone else. And although there’s been a lot of talk about the issue over the last couple of years, there’s been little action to tackle it.
“Power and privilege are being used to rig the system to increase the gap between the richest and the rest of us to levels we have not seen before,” said Raymond C. Offenheiser, President of Oxfam America. “Far from trickling down, income and wealth are instead being pulled upwards at an alarming rate.”
Hardworking people at the bottom of the income curve don’t make enough to put food on the table or buy medicine when their kids get sick, much less money to buy a home, start a business or save for the future. And so the engine of economic growth breaks down.
A year ago, Oxfam predicted that the 1% would soon own more than the rest of us, a prediction that came true even before 2015 ended.
Tax havens are at the core of the global system that allows large corporations and wealthy individuals to avoid paying their fair share, depriving governments, rich and poor, of the resources they need to provide vital public services and tackle rising inequality.
Globally, it is estimated that a total of $7.6 trillion of personal wealth sits offshore. If tax would be paid on the income that this wealth generates, an extra $190 billion would be available to governments every year. Such tax revenues could pay for public services, infrastructure, regulatory bodies, welfare systems and other goods and services that keep countries running.
In developing countries in particular, where there is an even bigger need for strengthening health and education services for the hundreds of millions of people who still live in extreme poverty, revenues from taxes could make such a difference. But when money is hidden in tax havens instead, this can work in reverse, shifting the burden on the poorest people.
We can do better than this.
We can build a better world. A world where there is decent work for all, where women and men are treated equally, where tax havens are something people read about in the history books, and where everyone pays their fair share to support a society that benefits everyone. Practical, smart reforms can level the playing field, making the system work better for all of us. We can start with ending the era of tax havens.