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Oxfam calls for global tax hikes for the world's richest

CNBC logo CNBC 21/01/2019 Chloe Taylor
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  • International non-profit organization Oxfam published a report on Monday that examines the disparity between the world’s richest and poorest people.
  • The charity accuses governments of exacerbating the gap by under-taxing corporations and the wealthy, while underfunding public services.
  • Oxfam called for governments to hike taxes on the wealth of the world’s richest 1 percent.

Oxfam has urged governments to hike tax rates for corporations and the world's richest to tackle the growing global wealth gap.

a close up of a sign: The logo on the front of an Oxfam bookshop in Glasgow on February 10, 2018. / AFP PHOTO / Andy Buchanan (Photo credit should read ANDY BUCHANAN/AFP/Getty Images) © CNBC The logo on the front of an Oxfam bookshop in Glasgow on February 10, 2018. / AFP PHOTO / Andy Buchanan (Photo credit should read ANDY BUCHANAN/AFP/Getty Images)

In a report published Monday, the charity revealed that billionaire fortunes rose by $2.5 billion per day in 2018, increasing 12 percent for the year as the poorest half of the world saw its wealth decline by 11 percent.

The report, titled "Public Good or Private Wealth," comes at a time when delegates are gathered in Davos, Switzerland, for the World Economic Forum.

Call for global tax overhaul

Governments are fueling inequality by underfunding public services whilst "under taxing" corporations and the wealthy and failing to clamp down on tax evasion, the report alleged.

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While a new billionaire was being created every two days, Oxfam said the tax rates being applied to those individuals had fallen to their lowest in decades.

According to the report, adding half a percent to taxes on the wealth of the world's richest 1 percent would raise more than enough money to educate 262 million children and provide healthcare that would save 3.3 million lives.

However, such taxes were being reduced or eliminated in wealthy nations and barely implemented at all in the developing world, Oxfam said. Tax rates for corporations in rich countries fell from 62 percent in 1970 to 38 percent in 2013, with the average rate in poor nations currently at 28 percent.

Tesla CEO Elon Musk attends the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai, China January 7, 2019. REUTERS/Aly Song © Thomson Reuters Tesla CEO Elon Musk attends the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai, China January 7, 2019. REUTERS/Aly Song

It also noted that in some countries, such as Brazil, the poorest 10 percent were paying a higher proportion of income tax than the wealthiest 10 percent.

Governments 'must deliver change'

Winnie Byanyima, executive director of Oxfam International, said those in authority needed to reevaluate their systems in order to address poverty and tackle inequality.

BEVERLY HILLS, CA - JANUARY 06:  Amazon CEO Jeff Bezos attends the Amazon Prime Video's Golden Globe Awards After Party at The Beverly Hilton Hotel on January 6, 2019 in Beverly Hills, California.  (Photo by Emma McIntyre/Getty Images) © 2019 Getty Images BEVERLY HILLS, CA - JANUARY 06: Amazon CEO Jeff Bezos attends the Amazon Prime Video's Golden Globe Awards After Party at The Beverly Hilton Hotel on January 6, 2019 in Beverly Hills, California. (Photo by Emma McIntyre/Getty Images)

"Governments must now deliver real change by ensuring corporations and wealthy individuals pay their fair share of tax and investing this money in free healthcare and education that meets the needs of everyone – including women and girls whose needs are so often overlooked," she said in a press release on Monday.

"The size of your bank account should not dictate how many years your children spend in school, or how long you live, yet this is the reality in too many countries across the globe. While corporations and the super-rich enjoy low tax bills, millions of girls are denied a decent education and women are dying for lack of maternity care."

Gallery: The 20 richest people of all time (Lovemoney)

Around 10,000 people die every day because they cannot access affordable healthcare, according to Oxfam. Children in developing countries are twice as likely to die before the age of five if they come from a poor family, while rich children spend twice as long in education.

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