Widening income inequality gap between countries

The covid-19 pandemic, a surge in global inflation, and increasing public debt has widened the gap between rich and poor countries, according to the Knight Frank wealth report. Inflation and public debt hamper countries’ ability to support vulnerable groups, according to the World Bank.

Meanwhile, the world’s ten richest men have doubled their fortunes from $700 billion to $1.5 trillion during the first two years of the covid-19 pandemic, Oxfam International said in January. Almost two-thirds of the new wealth amassed since 2020 has gone to the richest 1%.

Several countries eased their monetary policies to combat the economic impact of covid-19, leading to an influx of cash. This has, in turn, boosted the value of property and shares, which is mostly owned by the rich.

“While ordinary people are making daily sacrifices on essentials like food, the super-rich have outdone even their wildest dreams. Just two years in, this decade is shaping up to be the best yet for billionaires—a roaring ’20s boom for the world’s richest,” said Gabriela Bucher, executive director at Oxfam.

To tackle this, experts have called on governments to levy higher taxes on super-rich individuals. This category was also the prime contributor to the climate crisis, Oxfam said, with a billionaire emitting a million times more carbon than the average person. Therefore, they should be paying a carbon tax.

While India is considering an increase in capital gains tax for the top income earners, US president Joe Biden’s “billionaire tax” has drawn skepticism.

📬 Sign up for the Daily Brief

Our free, fast, and fun briefing on the global economy, delivered every weekday morning.