Taxing the super-rich a good start to ending wealth inequality

Pressure is mounting for the Albanese Government to end the Coalition's legacy of neoliberalism and take steps towards wealth equality, writes Bilal Cleland.

OXFAM IS A highly respected global movement of people working to end the injustice of poverty.

In 2021, its global confederation included 21 member organisations, or affiliates, which contribute their strengths and expertise to Oxfam to help it tackle the inequality that keeps people poor.

In its 2023 Report, Survival of the Richest: How we must tax the super-rich now to fight inequality, Oxfam outlines the polycrisis that our world is facing:

Hundreds of millions more face impossible rises in the cost of basic goods or heating their homes.

Climate breakdown is crippling economies and seeing droughts, cyclones and floods force people from their homes.

Millions are still reeling from the continuing impact of COVID-19, which has already killed over 20 million people. Poverty has increased for the first time in 25 years. At the same time, these multiple crises all have winners. The very richest have become dramatically richer and corporate profits have hit record highs, driving an explosion of inequality.

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While we still hear stories about how wealth will filter down to the masses if we take care of the rich – the trickle-down myth made popular by the Reagan conservatives and Thatcher Tories – the reality is starkly different.

The report continues:

Since 2020, the richest 1% have captured almost two-thirds of all new wealth — nearly twice as much money as the bottom 99% of the world’s population.

Food and energy companies more than doubled their profits in 2022, paying out $257 billion to wealthy shareholders, while over 800 million people went to bed hungry.

Only 4 cents in every dollar of tax revenue comes from wealth taxes and half the world’s billionaires live in countries with no inheritance tax on money they give to their children.

This is not the natural order of things, despite the propaganda to which we are subjected.

Oxfam points out:

‘Inequality is not inevitable. Inequality is a policy choice. Governments can take clear and concrete, practical steps to radically reduce inequality and give themselves the fiscal firepower to protect their people.’

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Inflation is making the cost of living spiral out of control.

The report elaborates:

‘Corporate price profiteering is driving at least 50% of inflation in Australia, the U.S. and Europe, in what is as much a “cost-of-profit” crisis as a cost-of-living one.’

Oxfam’s analysis of 95 companies that made a windfall profit illustrates the obscenity of this profiteering:

they made $306 billion in windfall profits;

their profits increased by more than two-and-a-half times (256%) in 2022 compared with the 2018–2021 average;

they paid $257 billion to shareholders in 2022 — 84% of their windfall profits were paid directly to shareholders; and

76% of the companies increased their profit margins.

Tax the rich

In order to lessen the terrible effects of this polycrisis, the rich must be taxed.

Oxfam has a suggested four-step plan to turn back this tide of inequality:

Introduce one-off solidarity wealth taxes and corporate windfall taxes as well as much higher taxes on dividend payouts to stop crisis profiteering.

Permanently increase taxes on the richest 1%, for example to a minimum of 60% of their income from both labour and capital, with higher rates for multi-millionaires and billionaires.

Tax the wealth of the super-rich at rates high enough to systematically reduce extreme wealth and lower power concentration and inequality.

Use the revenues from these taxes to increase government spending on inequality-busting sectors, such as healthcare, education and food security, and to fund the just transition to a low-carbon world.

Tax reform urgently needed as inflation soars

With the cost of living and wealth inequality still plaguing our economy, reforms are in need for our taxation system to stabilise it.

What about Australia?

Of great concern to Australians is the apparent reluctance of the Government which replaced the Morrison-dominated cabinet to take on the polycrisis affecting so many lives.

It is true that Australia cannot fix the world up by itself, but as Guy Rundle argues in Crikey:

‘Only in Australia do we have a Labor government committing to programmatic neoliberalism, without any vocal opposition. A genuine Left is gone from the Party. The unions lack any independent point of view with any visibility. Having mounted explicit social critiques before the Election, they have gone very quiet since.’

His conclusion is horrifying:

‘The Albanese Labor Government is now the world’s most efficient agent for extending neoliberalism and any understanding of Australian politics should proceed from there.’

The Liberal-National Coalition, the Opposition, is very obviously no solution. It is still mired in climate denialism, naked trickle-down myth-making and fear of the national anti-corruption body about to descend upon it.

It is calling for troops in Alice Springs and poking holes in the campaign for a Voice to Parliament with diversions about detail.

There is no alternative but to increase public pressure on the Albanese Government for a JobSeeker payment above the poverty line, the abandoning of tax cuts for the rich and the preservation of public hospitals and Medicare.