Davos, a picturesque Swiss village deep in snow, has become famous for hosting every January the World Economic Forum (WEF) where the rich and powerful, including world leaders, gather to discuss the state of the world, generally concluding that what is needed is more globalization, more capitalism and more democracy. A wealth tax is a hot topic rarely discussed. And yet it unexpectedly came up.
It’s the second year in a row that the hotels and meeting halls in Davos are going empty because of the pandemic, raising doubts in many that the WEF in virtual form is not the same, that it has lost its shine, that nothing of import can come out of it – much less a serious debate about a wealth tax.
Even the New York Times asked: What happens when the world’s biggest personalities don’t show up? The article was sprinkled with beautiful photographs of Davos showing empty streets covered in fresh, sparkling snow and vast deserted meeting rooms. And the suggestion was that nothing much can happen, that the kind of decision-making that shakes the world needs face-to-face interaction.
Apparently, that pessimistic perception proved erroneous and messages coming out of Davos can still shake the world – or at least, be refreshingly surprising: Reuters reported today that a group of over 100 billionaires, self-described as “Patriotic Millionaires”, has issued an open letter on Jan.17, the day “virtual Davos” opened, calling for a tax on wealth. They said the rich should pay more for COVID recovery.
“As millionaires, we know that the current tax system is not fair. Most of us can say that, while the world has gone through an immense amount of suffering in the last two years, we have actually seen our wealth rise during the pandemic – yet few if any of us can honestly say that we pay our fair share in taxes,” the signatories said.
As Reuters reported last year, when the world went into lockdown, billionaires’ wealth rose to staggering heights in 2020 – something we reported here on Impakter as well, the “pandemic profiteers”– while the global economy faced its worst recession since World War Two.
This resulted in the millionaires’ group calling for higher taxes and shortly thereafter, more than 130 countries agreed a deal to ensure big companies pay a global minimum tax rate of 15% – a minimal level to be sure, the idea is that this will stop the ultra-rich from looking for the lowest tax havens and make it harder for them to avoid taxation.
The patriotic millionaires however said the wealthy still needed to contribute more. A study they recently conducted with Oxfam and other non-profits highlighted what such a progressive wealth tax could do:
Set at 2% for those with more than $5 million and rising to 5% for billionaires, such a wealth tax could raise $2.52 trillion. That sum would be enough to lift 2.3 billion people out of poverty and guarantee healthcare and social protection for individuals living in lower-income countries.
The open letter came on the heels of a report issued by Oxfam on Monday detailing how over the last 2 years, since the start of the pandemic, the 10 richest individuals made $1.5 trillion – $15,000 a second or $1.3 billion a day, with a new billionaire minted every 26 hours. The ten listed were all men, most of them of tech fame (but not all of them): Elon Musk, Jeff Bezos, Bernard Arnault (& family), Bill Gates, Larry Ellison, Larry Page, Sergey Brin, Mark Zuckerberg, Steve Ballmer and Warren Buffett.
And last year there was also a World Bank article urging countries to consider a wealth tax to help reduce inequality, replenish their treasuries depleted by the pandemic recovery packages and reestablish “social trust” (read: avoid street protests). But so far, no country outside Argentina and Colombia has considered or initiated any new wealth tax since the start of the pandemic.
But it’s not the first time that the political world falls behind and the ultra-rich surges ahead. As I wrote in an article two years ago: The 2010s had been the billionaires’ decade, and we’re headed for another decade of the same. I predicted that the rise of the billionaires would shape our future, for better (a peaceful, balanced world) or for worse (climate Armageddon) and that much depended on what kind of billionaire takes power.
With this proposal – a wealth tax designed to lift 2.3 billion people out of poverty – it would appear that we are dealing with the right kind of billionaire. Let us hope that political leaders follow suit.
Editor’s Note: The opinions expressed here by Impakter.com contributors are their own, not those of Impakter.com. — Featured Photo: In the featured photo: Members of the Patriotic Millionaires hold a federal tax filing day protest outside the apartment of Amazon founder Jeff Bezos, to demand he pay his fair share of taxes, in New York City, U.S., May 17, 2021. Source: REUTERS/Brendan McDermid/File Photo