Ignored in Davos, taxation of the rich could help with food crisis, says expert

Wealth taxes are never a popular rallying cry in Davos. But Gabriela Bucher, the executive director of Oxfam International, was still frustrated that this week’s World Economic Forum turned a blind eye.

High energy prices are putting enormous pressure on household budgets around the world.

And earlier this month, the United Nations estimated that 193 million people in 53 countries experienced “acute hunger” last year — a number that is expected to rise as extreme weather and soaring food prices hit vulnerable populations​. around the world.

“You have to mobilize resources to deal with these situations — these extreme situations — that we’re dealing with right now,” Bucher said at the only panel on taxation on the official Davos program.

“One thing that can really change things is taxes.”

Given the magnitude of the crisis, governments should seriously consider taxing the wealth amassed by the world’s richest people, Bucher told CNN Business.

Even taxing wealth at relatively low levels, she emphasized, can make a big difference.

According to Oxfam, a 2% tax on assets over $5 million, graded at 5% for equity over $1 billion, could raise $2.5 trillion worldwide.

This idea of ​​more progressive taxation gained traction during the pandemic, as the wealthy saw their fortunes soar while millions of others were left behind.

Oxfam estimated in a report released ahead of Davos that around 573 people have joined the ranks of billionaires since 2020, bringing the global total to 2,668.

Last year, US Treasury Secretary Janet Yellen proposed taxing billionaires on unrealized gains on their assets. At this time, taxes are only charged when they are sold.

However, wealth taxes haven’t generated much conversation in the Swiss Alps this week, even as participants sounded the alarm about the impending famine crisis.

“We haven’t seen a big success story” for wealth taxes, OECD Secretary-General Mathias Cormann said during the panel’s debate. “It’s true that in terms of perceived justice and equity — in terms of policy — it’s attractive, but in terms of what it actually achieves in substance, it’s not that attractive.”

The head of the UN World Food Program, David Beasley, told CNN Business that climate change and the war in Ukraine could lead to widespread famine later this year. This would result in the destabilization of many countries and could trigger mass migration.

“What breaks your heart is that there is $430 trillion in wealth on Planet Earth today,” said Beasley. When her organization “doesn’t have enough money,” he continued, she has to “choose which child to eat.”

Last year, Beasley got into a Twitter confrontation with Tesla CEO Elon Musk after he asked him to invest 2% of his fortune, which he said would solve world hunger.

Beasley told Reuters this week that he remains hopeful that Musk or another wealthy individual will take a stand, and said he remains willing to get involved.

He probably shouldn’t count on Musk. On Twitter Thursday, Musk said, “The use of the word ‘billionaire’ as a pejorative is morally wrong and stupid,” and he echoed a comment that billionaires are most nefarious when they spend their money “to make money.” the good”.

pressure rises

But as rising cost of living becomes a major problem for low-income families in developed and developing countries, governments are increasingly willing to implement measures they had previously avoided.

The UK government on Thursday made a political turnaround and introduced a $6 billion tax on the profits of its oil and gas companies to fund help with energy bills, bowing to pressure from activists who have pointed out that many Brits now they had to choose between “heating and eating.”

On the forum, wealth taxes remained a list B talking point.

For Phil White, a British millionaire who traveled to Davos for a small protest calling for higher taxes on the rich – including himself – this was a missed opportunity.

“We’re going to see growing inequality from both rising energy prices and rising food prices,” White said. “Wealth taxes can play an immediate role in doing something about it.”