According to Oxfam, on current trends the richest 1 per cent of the world’s population will have a greater share of its wealth than the remaining 99 per cent within two years.
The figures were released to coincide with the opening of the annual bunfight for the rich and powerful, otherwise known as the World Economic Forum in Davos, Switzerland. Expect those who attend to pay lip-service to doing something about these uncomfortable issues. Some may actually mean what they say, realising that there are very real dangers in allowing 80 people to hoard more wealth than the 3.5 billion who struggle to get by on a few dollars a day.
At least some progress has been made on one of Oxfam’s key recommendations – the call for a clampdown on tax avoidance by wealthy individuals and corporations. It is getting harder to utilise places such as Switzerland as a tax haven, largely thanks to the efforts of America’s tax authorities. The EU is belatedly looking into deals done by various multinationals with Ireland, the Netherlands and especially Luxembourg. The OECD’s work on corporate tax avoidance has proceeded at a faster rate than many expected. The US has cracked down on the process of inversion (whereby companies do deals purely for the purpose of changing their tax domicile with a view to keeping their cash out of the hands of Uncle Sam). But it’s not enough.
Partly that’s because the various issues are being addressed piece-meal. Partly it’s because of a lack of ambition. We have, for example, barely scratched the surface of the vast amount of inherited wealth, which is rarely subject to tax (inheritance tax is the most avoidable of levies).
The likelihood is that Oxfam will produce the same report this time next year. And the people who attend Davos will promise to talk about it, before they jet off for a chat with their bankers in Zurich to discuss the latest tax shelter their London accountants have created for them. Tuesday 20 January 2015
Annex: Richest 1% to own more than rest of world
The wealthiest 1% will soon own more than the rest of the world's population, according to a study by anti-poverty charity Oxfam.
The charity's research shows that the share of the world's wealth owned by the richest 1% increased from 44% in 2009 to 48% last year.
On current trends, Oxfam says it expects the wealthiest 1% to own more than 50% of the world's wealth by 2016.
The research coincides with the start of the World Economic Forum in Davos.
The annual gathering attracts top political and business leaders from around the world.
Oxfam's executive director Winnie Byanyima, who will co-chair the Davos event, said she would use the charity's high-profile role at the forum to demand urgent action to narrow the gap between rich and poor.
In a statement ahead of the gathering, Ms Byanyima said the scale of global inequality was "simply staggering".
48% owned by richest 1% in 2014
54%owned by richest 1% by 2020
$1.9tn wealth of 80 top billionaires - equal to bottom 50% of rest of world
$600bn increase in wealth for 80 top billionaires in 4 years - or 50% rise
$750bn drop in wealth for the poorest 50% of the world in 4 years
(othernews)
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