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inequality in the world | Oxfam wants to make the rich pay

Poverty is gaining ground in the world, the first in more than a quarter of a century, Oxfam decried in a report published on Monday. To reduce inequality, we must tax the wealthy more, the organization claims on the eve of the World Economic Forum in Davos, Switzerland.

Poverty is known: why do we present it to us as something new?

Because it is: For the first time in 30 years, extreme poverty is getting worse, the World Bank revealed last October. From 1990 to 2019, the percentage of the population forced to live on less than $2.15 per day decreased dramatically, from 38% to 8.4%. Except that in 2020 it increased to 9.3%, or 719 million people. It was slightly less at the end of 2022 (685 million), but still more than in 2019 (648 million).

Well, but with the pandemic and inflation, everybody got it, right?

Not the richest! Oxfam states, citing the list of billionaires from Forbes. In 2022, nearly 13,000 billion Americans will be concentrated in the hands of fewer than 2,700 individuals. “Every billionaire is a political failure,” says Oxfam.

So the solution will be political?

This is what Oxfam is asking. The authority says more should be done to tax the rich and corporations, and the wealth concentration of billionaires should be cut in half by 2030. “This could avoid austerity and fight inflation and poverty.” widespread poverty and hunger,” the report suggests.

And taxing the rich, does it work?

Depends on. When Trudeau’s government was elected in 2015, it raised taxes on the wealthy by four percentage points. But we realized the receipts weren’t there in the first year because the richest are doing the tax planning,” recalls holder of the Research Chair in Taxation and Public Finance (CFFP) at the University of Sherbrooke, Luke Goodbot.

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On the other hand, it has long been believed that the combined rate applied to the highest income bracket cannot exceed the psychological threshold of 50% in Quebec. With the federal increase, it rose to 53.3% “and there was no disaster,” notes Mr. Godbout.

However, even if the rate applied to the wealthy is 53.3%, Statistics Canada data shows that “the rate actually paid is 30%,” stresses tax expert Brigitte Albin. So you find it encouraging that Ottawa wants to revise the minimum tax for individuals to ensure they pay their fair share. “Will the entire tax system be restored overnight? Probably not, but I don’t think they are doing it in order not to improve the situation.”

So we can easily increase taxes?

It’s not that clear. In Quebec, the weight of individual and corporate income taxes, such as payroll taxes and corporate capital taxes, is already the highest of all Canadian provinces, demonstrating the brand new Quebec tax estimate, published by CFFP on Friday. “We may already be using our cartridges,” Mr. Godbout slips.

As for the wealth tax, it is less popular in the developed economies of the Organization for Economic Co-operation and Development (OECD), he notes balance sheet from CFFP.

Of the 11 countries that imposed a net wealth tax on individuals in 1982, only four remain. And in most cases, revenue is less than 0.5% of its GDP. “Perhaps as time went by, they said to themselves that for all the effort and all the excitement that it is, they gave up,” says Mr Godbout.

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Are there encouraging signs?

And how! By the end of 2021, more than 135 countries and states have supported the idea of ​​a global minimum tax (IMM), with large multinational corporations subject to a minimum tax rate, in principle 15%. After thirty years of globalization, we have agreed to take the last necessary steps, namely, to deal with international tax competition. “She is laying the groundwork for this competition,” rejoices tax expert Brigitte Albin.

Originally announced for 2023, this minimum tax is likely to be delayed until 2024 or 2025. years or 30 years. says mI Aleppo. I am optimistic because in the context and with the prospect of a recession, the pressures will be to implement a fair share of taxes like the politicians are calling for. »

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  • 1700 billion dollars
    What wealth taxes Oxfam proposes to generate annually (5% for billionaires, 3% on fortunes over 50m, 2% for other millionaires). This amount would lift 2 billion people out of poverty.

    Source : The Law of the Rich: Why and How We Tax the Richest to Fight InequalityOxfam, January 2023.

    1.7 billion
    The number of workers whose wages have not kept pace with inflation in 2022, and who have experienced a “real decline in their ability to buy food or pay their electricity bills,” Oxfam estimates.

    Source : The Law of the Rich: Why and How We Tax the Richest to Fight InequalityOxfam, January 2023.