The ultra-rich become even richer yet demand more tax cuts

January 18, 2024
Man holding big bag of money
The world's five richest people have nearly doubled their wealth compared to last year. Image: Isaac Nellist/Green Left

Every January Oxfam, the aid and social justice advocacy group, releases its inequality report before corporate and state elites meet at the World Economic Forum summit in Davos, Switzerland.

Each year the report reveals the world’s ultra-rich have become even richer.

This year the world’s five richest men are revealed to have nearly doubled their wealth compared to last year.

Their estimated collective wealth rose from US$405 billion ($604 billion) to US$869 billion ($1.2 trillion).

Meanwhile, 5 billion people have suffered a fall in income. What little gains the world’s poorest 60% may have made before that were reversed.

“If each of the five wealthiest men were to spend a million US dollars daily, they would take 476 years to exhaust their combined wealth,” said the report, underlining the obscenity of this rising inequality.

Corporate and monopoly power has exploded inequality and “exploits and magnifies inequalities of gender and race, as well as economic inequality,” the report explained.

The richest 1% own 43% of financial assets, but an even smaller and richer elite control and benefit from those assets.

“Looking at the 50 biggest public corporations in the world, billionaires are either the principal shareholder or the CEO of 34% of these corporates, with a total market capitalization of US$13.3 trillion.

“Seven out of the ten biggest publicly-listed corporates in the world have a billionaire as CEO or as principal shareholder.”

It is therefore no surprise that while people all around the world are struggling with spiralling costs of living (and are being told to sacrifice to “right inflation”) the world’s billionaires are now “US$3.3 trillion or 34% richer than they were at the beginning of this decade of crisis, with their wealth growing three times as fast as the rate of inflation”.

The gap between the Global North (the rich countries of North America, Western Europe and Australia) and Global South (the rest) has also grown, Oxfam found.

The Global North, with just 20.6% of the world’s population, has 69.3% of the world’s wealth and 74.2% of billionaire wealth.

“For huge corporations, just as for super-rich individuals, the last two decades have been extraordinarily lucrative and the last few years have been better still: the biggest firms experienced an 89% leap in profits in 2021 and 2022. New data shows that 2023 is set to shatter all records as the most profitable yet,” the report adds.

The process of monopolisation has also accelerated.

“In sector after sector, increased market concentration can be seen everywhere,” the report notes.

“Globally, over two decades, 60 pharmaceutical companies merged into just 10 giant, global ‘Big Pharma’ firms between 1995–2015. Two international companies now own more than 40% of the global seed market.

“‘Big Tech’ firms dominate markets: three-quarters of global online advertising spending pays Meta, Alphabet and Amazon; and more than 90% of global online search is done via Google. Agriculture has seen consolidation within Africa. India faces ’rising industrial concentration’, especially by the top five firms.”

Big corporations have used their monopoly power to extract super profits, by raising their margins and adding to the cost-of-living crisis.

“Average mark-ups for mega corporations have ballooned in recent decades; while monopoly power enabled large firms in many concentrated sectors to implicitly coordinate to increase prices to drive up their margins since 2021, with energy, food and pharma sectors seeing huge price hikes,” Oxfam said.

Despite their ballooning wealth, the corporate rich are using their power to demand more tax concessions and even to protect their industrial-scale tax dodging by waging a “sustained and highly effective war on taxation”.

What is happening across the world is mirrored in Australia.

“The wealth of the three richest Australians, Gina Rinehart, Andrew Forrest and Harry Triguboff, has more than doubled since 2020 at a staggering rate of $1.5 million per hour,” Oxfam reported.

Yet Prime Minister Anthony Albanese confirmed on ABC Radio National on January 15 that Labor will implement the former Coalition government’s Stage 3 tax Cuts, which overwhelmingly benefit the rich and add to inflation.

Oxfam’s CEO Lyn Morgain said the proposed Stage 3 Tax cuts were “absolute lunacy”. When the country “cannot adequately house its own people … we are giving away money to the top end of town”.

Responding to Morgain, Albanese said “the Stage Three tax cuts start at $45,000 … If that’s your annual income, you are certainly not wealthy”.

However, as The Australia Institute’s executive director Richard Dennis pointed out, Albanese was misleading.

Someone on $45,000 a year will receive nothing from the Stage 3 Tax Cuts. Those on $45,906 will receive 45 cents a week and someone on $200,000 will receive $174.51 a week.

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