The combined wealth of the world’s very richest dipped by $500 billion in 2023, to $12.2 trillion from $12.7 trillion in March 2022, according to Forbes, whose list of 2,668 billionaires in 2022 also dipped to 2,640.
Nonetheless, wealth/income inequality continues to worsen globally. The top five richest individuals are Elon Musk, Bernard Arnault, Jeff Bezos, Larry Ellison and Mark Zuckerberg. Their combined wealth, as shown by Oxfam research, has increased by $454 billion or 114 percent in 2023. Meantime, the total wealth of the poorest 4.77 billion people – 60 percent of our global population –declined by 0.2 percent in real terms.
But something new seems to be arising.
First, a new poll in the 20 richest countries shows that 74 percent of the very rich people there support higher taxes on wealth to help address the cost-of-living crisis and improve public services.
There’s a group called Patriotic Millionaires, which campaigns against inequality. A survey conducted for them involved 2,300 individuals who hold $1 million-plus in investible assets. Specifically, 58 percent of the respondents supported a 2 percent wealth tax on people owning more than $10 million. And 54 percent thought that extreme wealth was a threat to democracy.
“This poll seems to show that the whole world, including the richest people, want to tax the super-rich,” remarked British farmer-turned-entrepreneur Guy Singh-Watson. The Guardian quoted him as asking, “So where on Earth is the leadership from our elected representatives who have the power to actually do it?”
“We, the very richest,” he added, “are sick and tired of inaction, so it’s hardly surprising that working people, at the sharp end of our rigged economies, have lost patience.”
A second development is that more than 250 billionaires and millionaires from 17 countries have formally declared such support. They signed an open letter demanding that the political elite currently meeting at the World Economic Forum in Davos, Switzerland, introduce wealth taxes to help pay for better public services around the world.
The letter says in part:
“Our request is simple. We ask you to tax us, the very richest in society. This will not fundamentally alter our standard of living, nor deprive our children, nor harm our nations’ economic growth. But it will turn extreme and unproductive wealth into an investment in our common democratic future.”
Among the letter’s signatories are two billionaire heiresses in the United States – Abigail Disney, of Disneyland and Valerie Rockefeller, of the New York multi-corporate business dynasty – and Brian Cox, an Emmy and Golden Globe-winning actor, and actor-screen writer Simon Pegg.
“We are also the people who benefit most from the status quo,” their letter further states. “But inequality has reached a tipping point, and its cost to our economic, societal and ecological stability risk is severe – growing every day. In short, we need action now.”
Brian Cox wryly commented: “We are living in a second ‘Gilded Age.’ Billionaires are wielding their extreme wealth to accumulate political power and influence, simultaneously undermining democracy and the global economy.” It’s long past time to act, he lamented. “If our elected officials refuse to address this concentration of money and power, the consequences will be dire.”
In a recent opinion piece in the Guardian, Caroline Knowles, author of the book, “Serious Money: Walking Plutocratic London,” wrote:
“Many of (the 60 richest people) I spoke to admit to having more money than they can spend in their lifetime. Some give money away and were happy to discuss with me the difficulties of ‘giving it away well’ – by which they mean where it can have the biggest impact.”
Of course, she noted, the rich tend to favor their favorite causes. “That philanthropy is often a means to extend their social networks while distracting us from thinking about their wealth. King Charles is the leading exponent of this.”
But Knowles also noted signs of “shifting attitudes.” Whether driven by guilt at the extent of their wealth or concern for the plight of the poor, “the rich are decidedly uncomfortable about stepping over homeless people [sleeping on the sidewalks] on their way to the opera.”
“Grotesque inequality and the stark nature of the climate crisis are making more of them reflect on their high consumption lifestyles,” she wrote, citing the survey for Patriotic Millionaires showing that a majority of the very richest favored higher taxes on wealth.
“Effective altruism,” a philosophy that supports using excess income to combat hunger and poverty rather than spending it on luxuries, is spreading through billionaires in high finance and in Silicon Valley, she observed.
Yet, Knowles wondered why, if some of the rich already welcome taxes on wealth, the Labor Party that is projected to win in Britain’s next national elections is reluctant to propose them. A recent YouGov poll revealed 73 percent of the British public support a 2 percent tax on wealth above five million pounds.
Wealth taxes, she explained, could be either annual levies or “one-offs,” such as the windfall tax that former UK prime minister Tony Blair imposed on privatized utilities in 1997. She cited a study by the London School of Economics and Warwick University suggesting a 5 percent one-off tax on total wealth exceeding 500,000 pounds that would raise 250 billion pounds over five years. That would be equivalent to UK’s annual health and education budgets combined.
But to avoid paying more taxes, many very rich people are preparing to move to other countries, “short-changing” public finances. If the Labor Party leader Keir Starmer could “tune out” the loud voices of those who speak for them, Knowles wrote, “he would hear that the British public and even many of the rich themselves support wealth tax.”
She ended with this appeal: “In 2022, one million children in Britain experienced destitution. We have never needed the money a wealth tax would raise more than we do now.”
Food for thought for the Marcos Jr. administration and Congress: Wouldn’t a wealth tax be better legislated than tinkering with the Constitution’s protectionist economic provisions to attract elusive foreign investments?
Published in Philippine Star
January 20, 2024