Wealth of top 1% crosses $40 trillion in past decade: Oxfam

The richest 1% amassed $42 trillion in new wealth over the past decade, nearly 34 times more than the entire bottom 50% of the world’s population, according to new analysis by British organisation Oxfam today ahead of a G20 Finance Ministers and Central Bank Governors meeting in Rio de Janeiro, Brazil.

The average wealth per person in the top 1% rose by nearly $400,000 in real terms over the last decade compared to just $335 –- an equivalent increase of less than nine cents a day -- for a person in the bottom half, says the report.

It comes in the backdrop of G20 Finance Ministers’ meeting in which they are expected sign a “groundbreaking global deal” to increase taxes on the super-rich. Oxfam says championed by the Brazilian G20 Presidency and backed by countries including South Africa, Spain and France, the proposal comes amid growing public demand for measures to rein in extreme levels of inequality and ensure that the rich pay their fair share of tax.

Max Lawson, Oxfam International Head of Inequality Policy, says inequality across the world has reached obscene levels. “...until now governments have failed to protect people and planet from its catastrophic effects. The richest 1% of humanity continues to fill their pockets while the rest are left to scrap for crumbs.”

“Momentum to increase taxes on the super-rich is undeniable, and this week is the first real litmus test for G20 governments. Do they have the political will to strike a global standard that puts the needs of the many before the greed of an elite few?”

Oxfam says taxing the very richest is one of the key solutions for governments to reduce inequality, tackle poverty and build a fairer, more caring, and greener future. “Oxfam calculated that less than eight cents in every dollar raised in tax revenue in G20 countries now comes from taxes on wealth. Oxfam’s research also found that the share of income of the top 1% of earners in G20 countries has risen by 45 per cent over four decades while top tax rates on their incomes were cut by roughly a third.”

The organisation's analysis shows a tax on British millionaires and billionaires at a rate of between one to two per cent of net wealth above £10 million, could generate up to £22 billion each year. “Taxing income from wealth at the same rate as income from work in the UK could raise another £16.7 billion a year.”

Globally, says Oxfam, billionaires have been paying a tax rate equivalent to less than 0.5% of their wealth. "Their fortunes has risen by an annual average of 7.1% over the last four decades, and an annual net wealth tax of at least eight per cent would be needed to reduce billionaires’ extreme wealth," it says, adding that G20 countries are home to nearly four out of five of the world’s billionaires.