5% Tax on the Wealthy Could Generate Nearly 1.5 Trillion Annually, Oxfam Reports

5% Tax on the Wealthy Could Generate Nearly 1.5 Trillion Annually, Oxfam Reports

A recent study by Oxfam revealed that in the G20 countries, less than 8 percent of tax revenue is derived from wealth. This implies that the top earners are not contributing as much as they should, resulting in governments missing out on almost 1.5 trillion (1,500 billion) dollars.

The study further showed that despite seeing their wealth increase, the tax contributions from high earners are decreasing. Since 1980, the richest 1 percent of people in G20 countries have seen their share of national income rise by 45 percent. During the same period, tax rates on their highest incomes have fallen by a third. Currently, the income of the top 1 percent is more than 18 trillion dollars (16.5 trillion euros), a figure that surpasses the gross domestic product of China.

A potential solution to global hunger and climate change

In response to this, Oxfam supports the proposal of hundreds of economists, advocating for a general wealth tax of 5 percent on the richest individuals. This measure could enable the wealthiest countries to generate almost 1.5 billion trillion dollars (1.38 trillion euros) annually.

According to Oxfam, the funds raised could sufficiently address world hunger, assist low- and middle-income countries in adapting to the climate crisis, and realign the world with the Sustainable Development Goals (SDGs) set by the United Nations. Even after these, there would still be a surplus of more than $546 billion.

Brazil, the current head of the G20, is already considering such a proposal. A poll conducted by Oxfam last month indicated that almost 75 percent of millionaires in G20 countries would support this measure.