Eight people on the planet have as much wealth as the poorest half of humanity. This is the observation that denounces the association Oxfam in its latest report, while meet, from Tuesday 17 January, in Davos, policy makers, business leaders and experts from around the world in the framework of the world economic Forum. Interview with Manon Aubry, a spokesman for Oxfam France.
inequality continued to increase ?
There is a huge downfall. Now, eight people on the planet hold as much wealth (wages, financial assets and non-financial) that the poorest half of the world’s population. They were 62 in 2015, 85 in 2014, 355 in 2013. Beyond the actual trend, this development is very brutal it can also be explained by the fact that it was disposed, to 2016, figures (1) more accurate on India and China, which have highlighted a poverty that we did not see before.
And inequality are spreading. Seven out of ten people live in countries where inequality had increased.
Who are the eight richest people of the planet ?
Only of men, all of whom reside in North America or Europe. The American Bill Gates (founder of Microsoft, whose wealth is estimated at $ 75 billion), the Spanish Amancio Ortega (Inditex, parent of Zara), Warren Buffet (the CEO and largest shareholder of Berkshire Hathaway), the Mexican Carlos Slim (telecom mogul, Latin-american), Jeff Bezos (founder and CEO of Amazon), Mark Zuckerberg (CEO and co-founder of Facebook), Larry Ellison (co-founder and CEO of Oracle) and Michael Bloomberg (founder and CEO of Bloomberg LP).
Where is concentrated poverty ?
only 1% of the poorest half of the world’s population resides in North America. 70 % in India, Asia Pacific, Africa. No surprise.
The France is also concerned by the inequalities ?
21 billionaires French have as much as the 40 % poorest of the French population.Between 2003 and 2014, the level of life monthly average of the richest has increased from 272 € whereas the level of life monthly of the poorest declined from 31 €.
inequality is growing in both directions : the rich are richer, and the poor see their income fall or stagnate.
what is the origin of these inequalities ?
first, the wage differentials. Then, an unequal sharing of value added. The profits generated by the companies are unfairly distributed.
We learned last week, that the companies of the CAC distributed over $ 55 billion of dividends to their shareholders last year, which is a record since the crisis of 2007.
The money is not missing, but it is not well redistributed.
What is also in question, according to you, it is the optimization and tax evasion ?
Individuals and businesses alleviate their tax burdens thanks to the competition among States to benefit from the relief the most high.
This race of tax competition has two effects : first, the tax system no longer plays its role of redistribution. And it is a very large shortfall to pay for public services, health, education… And the fight against inequality.
The States are a little more mobilized against evasion or tax optimization…
there has been an awareness of the problem, the result of the multiplication of cases of evasion of tax. We are working on this topic since a very long time and ten years ago, nobody listened to us, and we couldn’t have an echo in the media on these subjects. This has changed a lot today, it must be recognized.
But we put bandages on a system that is profoundly sick, instead of tackling the symptoms. It has not challenged the tax system as it exists. It was still a lot of delays relating to the tax evasion of firms, which are much faster than the States ! They have multiplied the mechanisms of tax evasion.
And the States are ambivalent ?
Yes, instead of agreeing on a level of taxation of businesses, they are themselves thrown into this race of tax competition. It is the one that taxera the least, in order to attract to its soil business. Take the case of Samsung Vietnam, has proposed a tax exemption for 10 years for the group and settled there. Indonesia has proposed fifteen years. The group has chosen Indonesia.
there is a race to the bottom ” of tax rates on companies. The United Kingdom is blackmailing on this subject, if, after Brexit, it did not retain its access to the european market. France, itself, has passed from 33% to 28 %… The impact is less resources for the State and the public finances.
There remains much to be done.
What do you expect from State ?
We advocate for a change in economic paradigms, that would be more based on the human. Concretely, this means : supervising the activity of multinational corporations on the issues of wages and of tax evasion. Regulate the finance with the financial transaction tax, which exists in France, but many efforts remain to be made at european level. It is stagnating : it is hoped an agreement by the end of the year 2017.
Another item : put in place a progressive tax. The tax system plays a very important role in the redistribution of wealth : who we tax, how we tax and at what rate ? The CSG is a good example of the tax unjust, fixed rate, paid in the same proportion by the high and low incomes. Ditto for VAT. The progressive tax, it is taxed at different rates depending on the level of income, and allocate revenue to the fight against inequality.
Historically, France is among the countries that have implemented the progressive tax, but here we go. In the past twenty years, one of the responses to the crisis and the deficit was to increase taxes, VAT, CSG. We have a model tax less progressive, and we multiply the tax incentives, tax credit etc, which reduce the revenues of the State. We invite the presidential candidates to review the tax system.
do we Need to put in parallel the evolution of inequality and that of the voting populist, in the United States or in Europe ?
You have to be careful on how to interpret millions of votes. In spite of everything, it is a reality : the voting populist, self-centredness meet a particular echo among those who are affected by poverty, struggling to finish their purposes of months. And this weakens democracy.
(1) The Oxfam report is based on a study from Credit Suisse which measures the wealth in the world and the differences between the 10 % richest and 10 % poorest. It compares, moreover, the poorest half of the population to the wealth of the billionaires, on the basis of the ranking of the magazine Forbes.
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