World Inequality Report 2022: Relevance
- GS 2: Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.
World Inequality Report 2022: Context
- Recently, World Inequality Report 2022, co-authored by economist Thomas Piketty has suggested that a “very moderate wealth tax” can increase the global income.
World Inequality Report 2022: Key points
- Tax ranging from 1 per cent of wealth owned over $1 million to 3 per cent for global billionaires can generate 1.6 per cent of global income.
- Wealth taxation in unequal societies helps tackle extreme inequality and generate substantial revenues to invest in the future.
- The report finds that he average increase in the wealth of billionaires is over 9 per cent per year.
- So, taxing them at 3.5 per cent still means their wealth is going to increase in coming years.
- The wealth tax can raise significant amount of money to invest in climate investments for bottom 50 per cent of the population, in education and also in health.
- The report finds that the 15 per cent minimum corporate tax deal is very low as compared to the statutory tax rate paid by low-end and middle-size companies/corporations.
- As per the estimates in the report, a 15 per cent minimum corporate tax would lead to revenue gains of 83.3 billion euros in EU, 57.0 billion euros in the US, 6.1 billion euros in China and 0.5 billion euros in India.
- The global bottom 50 per cent income share remains historically low despite growth in the emerging world in the past decades.
- The share of global income going to top 10 per cent highest incomes at the world level has fluctuated around 50-60 per cent, while the share going to the bottom 50 per cent lowest incomes has generally been around or below 10 per cent.
- The top 0.1 per cent of the global population captures more income than the entire bottom 50 per cent.
- The average annual wealth growth rates among the poorest half of the population were between 3 per cent and 4 per cent per year between 1995 and 2021.
- The poorest half of the world population only captured 3 per cent of overall wealth growth since 1995.
- The share of wealth detained by the world’s billionaires rose from 1 per cent of total household wealth in 1995 to nearly 3.5 per cent today.