Extreme wealth continues to grow in 2017

Two actors pose in a scenery of a 'Tax Haven' during an action of the international confederation of charitable organizations 'Oxfam' to demand European politicians to adopt a black list of tax havens in front of the European Council in Brussels, Belgium, 05 December 2017. [Stepahanie Lecocq/EPA]

According to an Oxfam report, 2017 registered a record high of millionaires, with a new millionaire every two days – a trend largely supported by tax evasion practices. EURACTIV.fr reports.

According to the report “Reward work, not wealth“, published by the NGO Oxfam, the concentration of wealth is still ongoing. Published annually at the start of the Economic World Forum in Davos, this report points out the rise of inequalities in favour of 1% of the world’s wealthiest. In 2017, 82% of generated wealth profited the richest 1%, whilst the poorest 50% saw no improvements.

Consequently, the number of millionaires is on the rise. In 2017, it experienced its biggest increase in history, with a new millionaire every two days. According to the report, this wealth is a result of inheritance, monopoly, or “close” relations with governments.

Tax evasion dual factor of disparity

The report states that the very wealthy are supported by tax evasion practices, which represent 200 billion dollars for the richest 1%, according to the economist Gabriel Zucman.

Manon Aubry, a spokesperson for Oxfam, said tax evasion contributes to the “vicious circle” of inequalities. “Companies reap profits at the expense of workers. These gains are then placed in tax havens, which allows companies to profit from even more wealth. This untaxed wealth is neither redistributed nor used to finance public policies aiming to reduce inequalities.”

A strong increase in inequalities in France

Similar tendencies are found in France. In 2017, 28% of generated wealth went to the richest 1%, compared to 5% for the poorest half.

In France’s case, this gap is mostly due to the significance of shareholders’ revenue. The report states that “France is the European champion when it comes to the amount of revenue given by companies to its shareholders”. This involves CAC40 companies with ahead Total, Sanofi and BNP Paribas.

“France was long considered less unequal. However, since the 1980’s inequalities have rapidly been increasing, especially because of the lack of public investment and laws favouring stronger deregulations,” Aubry said.

On this last point, the NGO condemned the French president Emmanuel Macron and his tax reforms, which, according to Manon Aubry, contribute to “giving more money to the rich” through lower taxes on higher-income households and large companies.

At the launch of its campaign, Oxfam asked the French government to start a reform on inequalities. The NGO put forth three principals on which to base the reform: limiting returns to shareholders and top executives in companies, taking steps against tax evasion, and putting in place a really redistributive tax system.

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