The return of Davos highlights an unprecedented global wealth grab

Davos is back. The private jets are landing. The Swiss ski resort’s promenade of bäckerei, bistros and confiseries making way for mega corporations’ networking hubs. 

For the first January since 2020, billionaires and government and corporate leaders return in person to the World Economic Forum’s year-opener, a festival of wealth that symbolizes inequality.

The return of Davos has us thinking about the world we had before the pandemic and the one we’re entering now. Much has changed. COVID-19 took the greatest loss of life since World War II; war is back on European soil; there were insurrections in the U.S. and now Brazilian democracies; we had the hottest summers on record. Is this the new world we want?

New Oxfam data show that, since 2020, the world’s richest 1 percent have grabbed twice as much new wealth as the 99 percent put together — somehow outdoing their extraordinary grab of half of new wealth over the past decade.

The closer to the top, the more dizzying the numbers. The world’s 2,495 billionaires (yes, 2,495 of them) grew their wealth by $2.7 billion each day. Welcome to the new roaring 20s!

How is everyone else doing? Well, 1.7 billion workers live in countries in which inflation is outpacing wages — a (global) pay cut. Alarmingly, the decades-long trend of extreme poverty decline is over. Closing the global gender gap is now further delayed by a generation — to 132 years, according to the World Economic Forum. New data indicates that the U.S. racial wealth gap is, after stalling, worsening.

That’s to mention nothing of the existential role of inequality in driving climate breakdown. A billionaire emits a million times more greenhouse gases than the average Joe.

Yet while so many world leaders had so much to say about economic inequality, too few did anything about it. A decade was lost to lip service.

Then came the pandemic, and new variants of billionaire wealth. Trillions of dollars were injected into financial markets to avert their collapse. This fresh cash, while essential to keeping economies afloat, ended up with the ultra-wealthy riding a stock market surge — without the guardrails of progressive taxation to share that wealth more equitably.

Add to that a corporate smash-and-grab for profit that has exacerbated and exploited inflation. Big pharma corporations, while fiercely monopolizing control of publicly-funded COVID-19 vaccines, made $1,000 in profit a second. Ninety-fivefood and energy corporations have more than doubled their profits in 2022.

Our new world isn’t being formed by some meteorite, but by choices we make. So far, the playbook of the 1 percent has been in full swing: One that liberalizes labor and unwinds workers’ rights, advances financialization and privatizes public goods. It’s endowing more money, and power, to the already rich. Consider the global growth of monopoly power that menaces markets and the erosion of taxes on the rich and corporations. Despite pressure on public budgets, almost all countries froze tax rates for the rich since 2020. Eleven cut them.

To counter this, we need sensible, sustained policies that redress monopoly power, backs workers and invest in our children. A strategic precondition to a more equal society is rethinking our tax system, including by taxing wealth and ensuring the richest pay their fair share.

The gutting of fair taxation predetermined today’s billionaire bonanza. For years, Jeff Bezos paid a true tax rate of under 1 percent. Worldwide, wealth taxes generate just four cents in every tax dollar. It’s mind-boggling that U.S. billionaires pay a lower tax rate than nurses and teachers. The Inflation Reduction Act introduced a minimum corporate tax rate and empowered tax administrators to go after tax dodgers, a positive step. 

Beyond tax, voters across states are raising minimum wages. This month saw the Federal Trade Commission taking on corporate servitude of workers by proposing to end noncompete clauses. Congress and the executive branch must advance this ambition if we’re to stand a chance at permanently reining in extreme inequality.

The last time things got this unequal, President Franklin Delano Roosevelt rewrote the rules of the American economy. In the wake of World War II, he went to Congress urging a 100 percent rate on income earned above what’d be $1 million today. They settled on 94 percent. It averaged 81 percent until 1981. In this period, the U.S. grew its middle class and put a man on the moon.

We can debate how high rates need to go. Rewrite the rules we must. A one-time 40 percent tax on the unrealized capital gains of U.S. billionaires would generate $1 trillion, for example. A trillion dollars that we could invest in proven inequality busters: like child care and health care.

Imagine what new choices would do for equality and for democracy, and to ensure everyone can thrive, not just survive. Isn’t that the new world we want?

Nabil Ahmed is Oxfam America’s director of economic justice.