Before the start of the World Economic Forum (WEF) in Davos, the development organization Oxfam emphatically warned of increasing inequality in the world, but also in Germany. For the first time in 25 years, extreme wealth and extreme poverty have increased at the same time. The significant increase in food and energy prices over the past year has made billionaires even richer. “While millions of people don’t know how to pay for food and energy, the crises of our time are bringing gigantic wealth gains for billionaires,” said Oxfam spokesman Manuel Schmitt.
According to the report by the anti-capitalism organization at the WEF annual conference in Davos, 95 food and energy companies worldwide more than doubled their profits in 2022. They generated $306 billion in random prizes and distributed $257 billion (84 percent) to shareholders. Oxfam defines wins here as random wins if they exceed the average for the years 2018 to 2021 by 10 percent or more.
According to Oxfam, the richest one percent gets the cream
The bottom line is that corporations and the super-rich are the winners of the corona pandemic and energy crisis, Oxfam noted. The richest one percent of the world’s population has collected around two-thirds of global wealth growth since the beginning of the corona pandemic. The trend is even clearer in Germany: 81 percent of the wealth growth that was generated in Germany in 2020 and 2021 was attributable to the richest one percent of the population.
The combined wealth of all billionaires has increased by an average of $2.7 billion per day since 2020. For every $1 per capita in wealth gain in the poorer 90 percent of the world’s population, a billionaire gained an average of $1.7 million.
At the same time, according to Oxfam, at least 1.7 billion workers live in countries where inflation is higher than wage growth. About every tenth person on earth is starving.
Schulze: Were thrown back
Development Minister Svenja Schulze also considers this development to be dangerous. “The pandemic, conflicts and not least the Russian war of aggression have thrown us back years in terms of poverty, hunger, health or education – while the rich have gotten even richer,” she told the German Press Agency. “If we don’t reduce inequality worldwide, we won’t be able to overcome the crisis,” warned the SPD politician. It is important to build social safety nets that absorb people in the event of loss of income, home, parenthood and incapacity to work.
Oxfam, on the other hand, is primarily demanding higher taxes for the rich as a way out of the crisis. Decades of tax cuts for the richest and for companies have recently exacerbated inequality. In some countries, the poorest have higher tax rates than billionaires. According to Oxfam, only four percent of tax revenue worldwide comes from taxes on wealth. “Corporations and their super-rich main owners must finally make their fair contribution to the common good,” demanded Schmitt.
Oxfam specifically expects the federal government to introduce a tax on unusually high profits during the energy crisis. Such so-called excess profits would have to be taxed at least 50 percent. In addition, a wealth tax must be reintroduced. A one-time levy on the high fortune is also necessary. The money should be invested in education, health and the social security systems.
Bartsch calls wealth distribution “always more obscene”
In view of the figures from Oxfam, the left in Germany is calling for a comprehensive tax reform. “The distribution of wealth is becoming more and more obscene – in Germany and worldwide,” said parliamentary group leader Dietmar Bartsch on Monday. Corporations could rake in billions in extra profits undisturbed, while the majority of the population would become poorer with high inflation.
The required tax reform must relieve small and medium-sized incomes and tax “excess profits” from the sale of energy and food as well as large fortunes. In addition, the “super-rich” would also have to pay into the social security system, i.e. into the statutory pension and health insurance system, Bartsch demanded.
