• Super-rich outstrip their extraordinary grab of half of all new wealth in past decade.
• Billionaire fortunes are increasing by US$2.7 billion a day even as at least 1.7 billion workers now live in countries where inflation is outpacing wages.
• A tax of up to 5 per cent on the world’s multi-millionaires and billionaires could raise US$1.7 trillion a year, enough to lift 2 billion people out of poverty.

The richest 1 per cent grabbed nearly two-thirds of all new wealth worth US$42 trillion created since 2020, almost twice as much money as the bottom 99 per cent of the world’s population, reveals a new Oxfam report today. During the past decade, the richest 1 per cent had captured around half of all new wealth.

‘Survival of the Richest’ is published on the opening day of the World Economic Forum in Davos, Switzerland. Elites are gathering in the Swiss ski resort as extreme wealth and extreme poverty have increased simultaneously for the first time in 25 years.

‘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,’ said Gabriela Bucher, Executive Director of Oxfam International.

‘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.’

In Hong Kong, Oxfam has also seen evidence of a widening wealth gap. Its recent report – the Hong Kong Poverty Report: Poverty and Employment During the Pandemic – revealed that the richest 10 per cent of households made a median monthly income that was 47.3 times higher than that of the poorest. Prior to the pandemic though, that number stood at 34.3. COVID-19 has had a major impact on everyone, but especially the poorest. Freezing the minimum wage for almost four years has had an even more detrimental impact on the poorest.

Kalina Tsang, Director General of Oxfam Hong Kong, said: ‘It’s high time we address the wealth inequality we are seeing within our borders. The HKSAR government can do this by ensuring that the minimum wage is adjusted annually to no less than HK$45.4, so workers earn more than what they would get if they received CSSA payments and thus maintain their motivation to work. As the largest employer, the government should take the lead in paying its outsourced workers a living wage, so they can meet their basic needs. And in the Mainland, we welcome the emphasis of “common prosperity” as the central government’s next development goal. Oxfam Hong Kong urges the government to work with society at large to concretise the goal into policies and plans, including improving taxation and rural public services, and putting mechanisms in place to measure the effectiveness of policies that narrow the income and wealth gaps.’

Across the globe, billionaires have seen extraordinary increases in their wealth. During the pandemic and cost-of-living crisis years since 2020, US$26 trillion (63 per cent) of all new wealth was captured by the richest 1 per cent, while US$16 trillion (37 per cent) went to the rest of the world put together. A billionaire gained roughly US$1.7 million for every US$1 of new global wealth earned by a person in the bottom 90 per cent. Billionaire fortunes have increased by US$2.7 billion a day. This comes on top of a decade of historic gains —the number and wealth of billionaires having doubled over the last ten years.

Billionaire wealth surged in 2022 with rapidly rising food and energy profits. The report shows that 95 food and energy corporations have more than doubled their profits in 2022. They made US$306 billion in windfall profits, and paid out US$257 billion (84 per cent) of that to rich shareholders. The Walton dynasty, which owns half of Walmart, received US$8.5 billion over the last year. Indian billionaire Gautam Adani, owner of major energy corporations, has seen this wealth soar by US$42 billion (46 per cent) in 2022 alone. Excess corporate profits have driven at least half of inflation in Australia, the US and the UK.

At the same time, at least 1.7 billion workers now live in countries where inflation is outpacing wages, and over 820 million people —roughly one in ten people on Earth— are going hungry. Women and girls often eat least and last, and make up nearly 60 per cent of the world’s hungry population. The World Bank says we are likely seeing the biggest increase in global inequality and poverty since WW2. Entire countries are facing bankruptcy, with the poorest countries now spending four times more repaying debts to rich creditors than on healthcare. Three-quarters of the world’s governments are planning austerity-driven public sector spending cuts —including on healthcare and education— by US$7.8 trillion over the next five years.

Oxfam is calling for a systemic and wide-ranging increase in taxation of the super-rich to claw back crisis gains driven by public money and profiteering. Decades of tax cuts for the richest and corporations have fuelled inequality, with the poorest people in many countries paying higher tax rates than billionaires.

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

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 US$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 per cent, just over half as much as the average top tax rate on wages and salaries.

According to new analysis by the Fight Inequality Alliance, Institute for Policy Studies, Oxfam and the Patriotic Millionaires, an annual wealth tax of up to 5 per cent on the world’s multi-millionaires and billionaires could raise US$1.7 trillion a year, enough to lift 2 billion people out of poverty, fully fund the shortfalls on existing humanitarian appeals, deliver a 10-year plan to end hunger, support poorer countries being ravaged by climate impacts, and deliver universal healthcare and social protection for everyone living in low- and lower middle-income countries.

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About Oxfam Hong Kong

Oxfam is a global organisation committed to creating a world without poverty through its advocacy, development and humanitarian work.