On January 21, 2019, Jason Lemon writes on Newsweek:
The 26 richest people in the world have as much combined wealth as the poorest half of Earth’s population, while the gap continues to increase, according to a new report.
Oxfam International, a confederation of charities based in the United Kingdom that works to alleviate poverty, released its annual inequality report, calling for governments to increase taxes on the wealthy to address the growing problem. Since the financial crisis in 2008, the world’s wealthiest have increased their fortunes by billions of dollars, while the bottom 50 percent of the global population—about 3.8 billion people—have seen an overall decrease of more than 10 percent.
“People across the globe are angry and frustrated,” Winnie Byanyima, Oxfam’s executive director, warned in a statement, according to Al Jazeera. “Governments must now deliver real change by ensuring corporations and wealthy individuals pay their fair share of tax,” she said, pointing out that even a minimal increase would raise substantial funds that could be used to cover education and health care costs.
Oxfam International
✔@Oxfam
Last year the wealth of the world’s billionaires increased while the world’s poorest got even poorer. Please share to demand governments #FightInequality and #BeatPoverty.
In some Western nations, such as Brazil and the United Kingdom, the wealthiest 10 percent actually pay a lower portion of their income in taxes than the poorest 10 percent, according to the report. “Getting the richest 1 percent to pay just 0.5 percent extra tax on their wealth could raise more money than it would cost to educate all of the 262 million children out of school and provide healthcare that would save the lives of 3.3 million people,” the document explained. It is also estimated that the world’s super wealthy have hidden approximately $7.6 trillion from tax authorities, which would deprive developing nations of about $170 billion annually.
However, the report also said positively that the number of people living in extreme poverty has decreased substantially in the past few decades.
“The massive fall in the number of people living in extreme poverty is one of the greatest achievements of the past quarter of a century but rising inequality is jeopardizing further progress,” said Oxfam’s director of campaigns and policy, Matthew Spencer, according to The Guardian.
“The way our economies are organized means wealth is increasingly and unfairly concentrated among a privileged few while millions of people are barely subsisting. Women are dying for lack of decent maternity care and children are being denied an education that could be their route out of poverty,” he said.
Progressive politicians in the United States, led by independent Vermont Senator Bernie Sandersand Democratic New York Senator Alexandria Ocasio-Cortez, have been pushing the government to address the disparity, which is growing across the country as well. Ocasio-Cortez has pushedfor a 70 percent tax on wealth earned above $10 million, receiving criticism from right-wing politicians, who inaccurately claim she wants to implement a general tax of 70 percent. But 59 percent of Americans would support the tax plan, according to a recent poll.
Analysts have also pointed out that the wealthy in the U.S. have been getting tax breaks from the government for decades. In the 1960s, when the American economy was booming, income above $400,000—which would be about $3 million today adjusted for inflation—was taxed at 70 percent or above. The decade before that, the amount hovered above 90 percent.
Meanwhile, Trump’s massive tax cuts, which primarily benefited the wealthy and corporations, have led to a dramatic increase in the national deficit. Analysts predict it will surpass $1 trillion this year, The New York Times reported.
“We must repeal the Trump tax breaks for the top 1 percent and large, profitable corporations,” Sanders tweeted on Friday. “At a time of massive income and wealth inequality, we need to rebuild our crumbling infrastructure and create a sustainable economy, not make the very rich even richer.”
Gary Reber Comments:
I gotta wonder whether the people writing the report even understand “wealth OWNED by a small minority.” Although the report does state: “The survey uses the value of an individual’s assets, mainly property and land, minus debts, to determine what he or she ‘owns’. The data excludes wages or income.”
So it does boil down to how much OWNERSHIP of wealth-creating, income-producing capital assets one has that determines their level of wealth.
Study after study studies the poor, which boils down to the poor do not OWN productive capital assets. Instead, logically should be study the rich and determine why they are rich. If we did, the reality would be that they OWN productive capital.
In our pre-industrial society, labor was the principal factor in the creation of wealth and there was far, far less economic inequality. In today’s world that is no longer the case, as the human input is exponentially being replaced by the non-human factor –– productive physical capital.
What needs to be understood is that fundamentally, economic value is created through human and non-human contributions.
The role of physical productive capital is to do ever more of the work efficiently, which produces wealth and thus income to those who OWN productive capital assets. As such, “capital” can be defined as productive assets, including job-displacing physical and informational technologies, structures, land and other natural resources, patents and copyrights — or non-human “things” (property) contributing to the production of marketable goods, products, and services.
People invented “tools” to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive — the core function of technological invention and innovation. Most changes in the productive capacity of the world since the beginning of the Industrial Revolution can be attributed to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Capital does not “enhance” labor productivity (labor’s ability to produce economic goods). In fact, the opposite is true. It makes many forms of labor unnecessary.
The fact is, productive capital is increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all. If both labor and capital are independent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, this is virtually never addressed in study after study or report after report. Instead, the solution involve redistributing the wealth of those who now OWN to those who do not OWN, without diminishing their wealth, but through means of taxation to generate revenue to support government-controlled “welfare” programs, wether government “make-work” job creation, social services or guaranteed annual income.
What is missing is a discussion of how to empower EVERY American child, woman, and man to acquire personal OWNERSHIP of productive capital assets to be formed in the future, without taking anything away from those who already own. This can be accomplished using insured, interest-free capital credit, repayable out of the future earnings in the investments of our future.
Conventionally, most people do not have the right to acquire productive capital with the self-financing earnings of capital; they are left to acquire, as best as they can, with their earnings as labor workers and the pledge of past savings as loan collateral. This is fundamentally hard to do and limiting. Thus, the most important economic right Americans need and should demand is the effective right to acquire capital with the earnings of capital.
Solutions that broaden capital OWNERSHIP simultaneously with the growth of the economy involve the following system reforms:
Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice.
Support the Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/.
