The increasingly wealthy ultra-rich, symbols of growing inequality

In fifty years, the object of fascination has gone from the fictional man worth three billion to the very real man worth almost a hundred times more: Elon Musk, the world’s first fortune, is the symbol of deepening inequalities. detailed in a report. The observation is clear: The very rich have seen their fortunes grow on essentially financial assets in recent years, notes the 2022 Global Inequality Report released Tuesday, an annual report that provides a detailed inventory of global inequalities.

Coordinated by economist Lucas Chancel, with contributions from Thomas Piketty, Emmanuel Saez and Gabriel Zucman, this 228-page report advocates for the establishment of progressive wealth taxation on a global scale, as well as an international financial registry to act against tax evasion. .

Read also: Covid has increased the number of billionaires in Switzerland

Covid-accelerated polarization

For a small breed, this heritage is stratospheric: the US magazine Forbes ranking, which assesses what the richest have in real time, shows that the top ten have more than $ 100 billion each. At the helm, the head of Tesla with 266 billion dollars. All Americans except the French head of luxury group LVMH Bernard Arnault amassed their 12-figure fortune primarily in technology thanks to a surge in share prices. Jeff Bezos, in second place, owns 9.9% of Amazon and Mark Zuckerberg 12.3% of Facebook.

“After more than 18 months of Covid-19, the world is even more polarized” in terms of wealth inequality, Lucas Chancel, co-director of the World Inequality Laboratory at the Paris School of Economics, told AFP. “While the inheritance of billionaires has taken more than 3.6 billion euros, 100 million more people have joined the ranks of extreme poverty,” he explains, while for 25 years extreme poverty had decreased.

Read also: The covid crisis has deepened inequalities in Switzerland

Modernize taxation

According to the report, the 52 richest people have seen the value of their wealth grow by 9.2% per year for 25 years, much more than the less gifted categories. The club with the richest 1%, that is, people with more than 1.3 million dollars in assets, has captured more than a third of the accumulated fortune on the planet since 1995. “Given the extremely high concentration of wealth, modest and progressive taxes can generate significant revenue for governments, ”whose debt soared in the face of the 2007-2008 crisis and pandemic, the report suggests.

Where the wealth tax today focuses too much on land, it militates for a modernization and progressivity of this tax. All forms of assets must be considered, especially financial assets, which account for the bulk of modern fortunes. The report assesses a tax hypothesis in several brackets, starting at $ 1 million and progressing to a high bracket that exceeds $ 100 billion in wealth.

On tax evasion, the report recommends the creation of an international financial register, for example under the auspices of the OECD or the UN, which “would allow tax and regulatory authorities to verify whether taxpayers report their taxes correctly. Capital assets and income, regardless of what offshore financial institutions want to communicate ”.

The beginnings of a change

At the same time, the Global Inequality Report calls for maintaining a wealth tax for expatriates and imposing a multi-year “exit tax” on taxpayers who decide to move for tax reasons. The more automatic exchanges of information now between tax jurisdictions and digital progress will allow a more precise application of the rules, this report also explains.

“We are observing the beginnings of a change”, Lucas Chancel wants to believe, citing the recent introduction of an exceptional contribution on the great fortunes in Argentina, a debate on the subject during the recent German legislative elections and the voluntarism of the president. American Joe Biden, although several of his initiatives collided with Congress. The adoption, after years of negotiations, of a proposal for a minimum tax of 15% for wealthy multinationals is also, according to him, a sign of change at work. “We will get there at some point simply because the states need to finance their expenses,” he adds.

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