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paradise papers
Top .001% Making 636% More Since 1980, But GOP Tax Scam Will 'Turbocharge Inequality'
As Republicans seek to ram through tax plan that favors corporations and uber wealthy, global inequality report shows ever-growing chasm between rich and poor
Dec 14, 2017
A new report released Thursday finds that economic inequality has soared in nearly every country around the world, with the United States' income and wealth gaps widening to a particularly extreme degree compared to European and other countries.
The World Inequality Report, compiled by five economists including Thomas Piketty and Emmanuel Saez, found that the richest one percent of Americans held 39 percent of the nation's wealth in 2016, compared with about 22 percent in 1980. Meanwhile, the average annual income for the bottom 50 percent of Americans has stayed at $16,000 per adult over the last four decades, adjusting for inflation.
Most of the increase in wealth at the top has been due to fast-rising incomes among the very richest Americans; while annual income for the one percent has shot up by 205 percent since 1980, the top .001 percent of Americans--only about 1,300 households--have seen their earnings go up by 636 percent.
In an editorial published in the Guardian alongside their new report, Piketty and his colleaguesnoted that the Republican tax plan that Congress is expected to vote on as early as next week "will not only reinforce this trend, it will turbocharge inequality in America. Presented as a tax cut for workers and job-creating entrepreneurs, it is instead a giant cut for those with capital and inherited wealth. It's a bill that rewards the past, not the future."
The tax bill would further leave out the bottom 50 percent of American earners, who have been left out of wealthy's income boom due to the collapse of federal minimum wage laws, the weakened power of unions, and increasingly unequal access to higher education, the report finds.
"Recent research shows that there can be an enormous gap between the public discourse about equal opportunity and the reality of unequal access to education," reads the study. "Democratic access to education can achieve much, but without mechanisms to ensure that people at the bottom of the distribution have access to well-paying jobs, education will not prove sufficient to tackle inequality. Better representation of workers in corporate governance bodies, and healthy minimum-wage rates, are important tools to achieve this."
While income inequality has reached a new extreme in the U.S., Western European countries have experienced slightly less severe gaps. The top 10 percent of earners hold about 37 percent of wealth in Europe, and the income share captured by the richest one percent in the region has only risen from about 10 percent in 1980 to about 12 percent in 2016, compared to the rapid rise in the U.S.
Meanwhile, the Middle East, Africa, and Brazil were noted as places where income gaps haven't grown much in the last four decades--instead staying at a severe level since 1980. In Brazil and sub-Saharan African nations, the wealthiest 10 percent of the population own about 55 percent of the national income, while in the Middle East they control more than 60 percent.
The World Inequality Report was released a day after the World Health Organization and the World Bank published its own study showing that nearly 100 million people around the world are forced to choose between healthcare costs and other necessities, including food and education, due to extreme poverty.
"Furthermore," the WHO-World Bank study notes, "some 800 million people spend more than 10 percent of their household budget on health care, and almost 100 million people are pushed into extreme poverty each year because of out-of-pocket health expenses."
In addition to access to education and a living wage, the World Inequality Report recommends progressive tax structures as a way to combat soaring inequality around the globe, as well as a crackdown on tax havens among the wealthy, like those detailed in the recently-released Paradise Papers.
In their report, Piketty and his fellow economists say that rising global inequality is "not inevitable in the future" and point to European nations, who have enacted policies specifically designed to lessen the gap between rich and poor. "If in the coming decades all countries follow the moderate inequality trajectory of Europe over the past decades," they write, "global income inequality can be reduced--in which case there can also be substantial progress in eradicating global poverty."
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Millennials Fall Far Behind as World's Richest 1% Hoard Half of Global Wealth
70 percent of the world's working-age adults have less than $10,000 each
Nov 14, 2017
Anti-poverty advocates on Tuesday implored world leaders to combat the massive wealth gap described in the annual Global Wealth Report released by Credit Suisse, which showed that the world's richest one percent own just over half of the global wealth.
"This report highlights the huge gulf between the haves and the have nots--the world's richest one percent own more than everyone else combined while the poorest half of the population share less than a penny of every pound of wealth," said Katy Chakrabortty, head of advocacy for Oxfam, in a statement.
At the height of the global financial meltdown in 2008, the world's richest people held 42.5 percent of the global wealth, compared with 50.1 percent today. Thirty-six million people with over a million dollars make up just 0.7 percent of the global population, but control 46 percent of the world's $280 trillion dollars.
Meanwhile, 3.5 billion people who make up the world's least wealthy adults each have assets of less than $10,000. These adults account for 70 percent of people who are of working age.
The group is disproportionately represented in developing countries. "In some low-income countries in Africa, the percentage of the population in this wealth group is close to 100 percent," according to Credit Suisse's report.
The Global Wealth Report also presents a dire outlook for the world's young adults, referred to in the document as "unlucky millennials." Adults between the ages of 20 and 29 especially "faced the rigors of the financial crisis and the high unemployment that followed in many countries, and have also been widely hammered by high housing prices, rising student debt, and increasing inequality," according to the report.
Despite being better educated than their parents' generation, "millennials are not only likely to experience greater challenges in building their wealth over time, but also greater wealth inequality than previous generations."
"We expect only a minority of high achievers and those in high demand sectors such as technology or finance to effectively overcome the 'millennial disadvantage'," said Urs Rohner, Credit Suisse's chairman, in an interview with the Guardian.
Oxfam noted that the report is just the latest sign that the world's poorest have the deck stacked against them, recalling the recent release of the Paradise Papers, which showed how the rich hide their wealth in order to avoid paying the taxes that stand to shore up public services that, when well-funded, benefit the whole population.
"The recent Paradise Papers revelations laid bare one of the main drivers of inequality--tax dodging by rich individuals and multinationals," said Chakrabortty. "Governments should act to tackle extreme inequality that is undermining economies around the world, dividing societies, and making it harder than ever for the poorest to improve their lives."
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We Must End Global Oligarchy
'This massive level of wealth and income inequality, and the political power associated with that wealth, is an issue that cannot continue be ignored. We must fight back.'
Nov 13, 2017
One of the major, untold stories of our time is the rapid movement toward global oligarchy, in which just a handful of billionaires now own and control a significant part of the world economy.
Here in the United States, the top one-tenth of 1% owns almost as much wealth as the bottom 90%. Incredibly, according to a recent report from the Institute for Policy Studies, three of the richest people in America--Bill Gates, Jeff Bezos and Warren Buffett--now own more wealth than bottom 160 million people in our country.
"The Paradise Papers make it clearer than ever that we need, in the United States and throughout the world, a tax system which is fair, progressive and transparent."
But this is clearly not just an American issue. It is a global issue. While millions of people throughout the world live in dire poverty, without clean drinking water, adequate health care, decent housing, or education for their kids, the six wealthiest people in the world as ranked by Forbes Magazine own more wealth, according to Oxfam, than the bottom half of the world's population, 3.6 billion people.
This massive level of wealth and income inequality, and the political power associated with that wealth, is an issue that cannot continue be ignored. We must fight back.
Thanks to the so-called Paradise Papers, a trove of millions of documents analyzed by the International Consortium of Investigative Journalists (ICIJ) and its collaborating news outlets, we now have a better understanding of how the largest corporations and wealthiest people in the world avoid paying their taxes and hide ownership of assets. Needless to say, these billionaires are all strong supporters of our military, our veterans, our infrastructure, our schools and other government services. They would just prefer that you pay for those activities, not them.
According to the ICIJ's investigative reporting, the Americans listed as having offshore accounts in the Paradise Papers, (which have not been independently reviewed by CNN), are a who's who of billionaires, some of whom are the very same officials who have led the effort to promote the Republican tax plan, which would provide even more tax-avoiding opportunities to the very rich.
Even before these revelations, we knew that tax dodging by the wealthy and large corporations, not just in the US but globally, was taking place on a massive scale. In 2012, the Tax Justice Network, a British advocacy group, estimated that at least $21 trillion was stashed in offshore tax havens around the world. In other words, while governments enact austerity budgets, which lower the standard of living of working people, the super-rich avoid their taxes.
According to Berkeley economist Gabriel Zucman, individuals in the US are avoiding $36 billion through offshore tax schemes and US corporations are avoiding more than $130 billion through these schemes. The situation has become so absurd that one five-story office building in the Caymans is now the "home" of nearly 20,000 corporations--and that is just one of many tax havens operating across the globe.
The essence of oligarchy is that the billionaire class is never satisfied with what they have. They want more, more and more--no matter what impact their efforts have on working people, the elderly, children, the sick and the poor. Greed is their religion. While the oligarchs are avoiding their taxes, Trump and his Republican colleagues, ostensibly in order to save federal dollars, have been trying to throw tens of millions of Americans off of their health insurance, and make massive cuts in education, nutrition assistance and affordable housing.
As a candidate for president, Trump promised that he would stand up for the working class of this country. Needless to say, that was a lie. Almost half of the benefits in the Trump/Republican tax plan would go to the top 1%, according to the Center for Budget and Policy Priorities. Additionally, they want to lower the corporate tax rate from 35% to 20%, even though in 2012 one out of every five large, profitable corporations in the US paid no federal income taxes at all and between 2008 and 2015, 18 corporations had a tax rate lower than 0%.
Republicans also want to make it easier for companies to shelter their profits overseas and pay zero taxes. The "territorial tax system" they are proposing, which means companies would be taxed only on income earned within our country's borders, would exempt the offshore profits of American corporations from US taxes and allow for a one-time 12% tax on their offshore cash profits when brought back into the United States.
Meanwhile, while the wealthy and large corporations are receiving huge tax breaks, nearly half of middle-class families would actually see their taxes go up by the end of the decade by eliminating deductions for medical expenses, student loan interest rates, state and local income and sales taxes, and the cost of health insurance for the self-employed.
The Paradise Papers make it clearer than ever that we need, in the United States and throughout the world, a tax system which is fair, progressive and transparent.
Now is the time, in the United States and internationally, for people to come together to take on the greed of the oligarchs. We can and must create a global economy that works for all, not just a handful of billionaires.
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