The pandemic caused by COVID-19 is making life difficult for everyone, and we are all in a similar situation– this has been a popular saying throughout the entirety of the crisis.
It is correct to say that all of us are currently sailing aboard the Titanic together. On the contrary hand, some individuals are traveling in first class, others are riding in third class, and still, others are paddling against the current. There are insufficient lifeboats available for everyone.
In actuality, the ultra-wealthy aren’t only protected from this crisis by their riches, which empowers them to safeguard from the virus on yachts or flee it on private planes, but some of them are even appreciating an unparalleled bounty during these challenging times. The USA is a prime example of this phenomenon.
In accordance with a new study published by the progressive Institute for Policy Studies in Washington, DC, and Americans for Tax Fairness, billionaires in the United States raked in a financial windfall of over $434 billion in the 2 months between the middle of March and the middle of May as a direct result of the COVID-19 crisis. This occurs at a time when there are a minimum of 40 million unemployed people in the United States who are battling to make ends meet, and when there are 265 million individuals around the world who are in danger of dying from hunger.
While emergency doctors and nurses put their well-being and lives at risk to keep the population operating and caring for the sick, the largest financial victor by far is the world’s wealthiest man, Jeff Bezos. Bezos is seeing his fortune grow by nearly $35 billion due to the spike in the worth of his business Amazon, which has benefited from people being trapped in lockdowns and turning to shop online.
When someone, criticizes the excessive wealth of billionaires, some individuals hurry in to protect them, asserting that critics are just jealous and that billionaires have earned this success.
Should We Expect This to Be True?
There is a common story told about billionaires, particularly those who made their fortune in the technology industry. This story is similar to the origin of a superhero. It goes something like this: X, while working in their homes, happened to come up with an incredible idea, against the odds, carried it to the market, and is now reaping the benefits of their bright idea.
It is a fact that many billionaires began their financial lives with nothing (or at the very least, with much more moderate wealth), and it is also true that many of them displayed remarkable brilliance in the early stages of their careers. Is it possible, though, that the business savvy of these individuals isn’t worth that much more than all of the other people’s labor combined?
It is incomprehensible that it would take an American household earning the average of $60,000 per year nearly 2.5 million years to accrue the approximate $147 billion that Jeff Bezos is believed to be worth… provided that they did not invest a single dime during that time. In the case of a poorly paid Amazon employee on the production floor, it would take more than 4 million years of savings in their entire salary to accumulate the same amount of wealth as their boss.
These People Are Employed in the Wealthiest Country in the World
Now put yourself in the position of a low-income employee in South Asia or sub-Saharan Africa and try to visualize how long it would take you to earn this amount of money.
The ideas, work ethic, or vision of any one person are not worth the thousands or perhaps even millions of years of labor that others have put in. This concept is especially demeaning in this period of crisis when society’s function is not dependent on wealthy business magnates, top CEOs, or hedge fund executives but rather on nursing staff, doctors, emergency responders, caretakers, supermarket employees, delivery drivers, and sanitation workers.
Furthermore, there is almost always an unsightly and obscured ugly side, which throws significant doubt on the concept that billionaires “earned” their unimaginable fortunes. There are definitely “good billionaires” and “bad billionaires,” but as far as we can tell, there aren’t any billionaires who created their billions honestly and straightforwardly, without engaging in activities that raise serious questions regarding their morality.
These methods could include shortchanging employees or overloading them, monopolizing the increases in productivity supplied by their employees, outsourcing jobs, limiting competition, and even practicing monopolies or near-monopolies in their respective industries.
The tax system is one region in which the financial elite and major corporations have been rejoicing in the bank while the remainder of society has been weeping in anguish. While regular wage earners in developed economies, particularly those with a rigorous social security net, disparately shoulder the burden of income tax, rates of corporate taxation, as well as taxes on high incomes and investment, have hit historically low levels, and a de facto regressive tax system is progressively becoming the new normal.
The outcomes of this lopsided and unfair system are plain to see for everyone to see. According to a report published by the Institute for Policy Studies, the wealth of some of the fattest cats in America increased by more than 1,100 percent between the years 1990 and 2018, even though their corresponding tax liabilities dropped by an astounding 79 percent during the same period.
In addition to this, the unparalleled movement of capital and wealthy individuals, which has been facilitated by decades of deregulation as well as the utter lack of an international tax regimen or collaboration of tax policies, has made it possible for many companies and billionaires to handover their earnings to tax havens, which enables them to avoid their tax liabilities and, along with them, their social obligations. This has also resulted in countries that are afraid of falling behind competing with tax havens engaging in a race to the bottom.
Although corporation tax rates are at a record low, the International Monetary Fund (IMF) forecasts that government agencies are bereft of up to $600 billion a year in company tax due to the kind of creative financial reporting that has been facilitated through decades of financial deregulation. This type of accounting system walks the fine line between lawful “tax avoidance” and criminal “tax evasion.” Economists estimate that 40% of the profits generated by multinational corporations are artificially moved to offshore accounts from countries with higher tax rates, particularly those in Europe.
To add petrol to the fire, not only has liberalization wreaked havoc on the welfare system but among the main recipients of government aid are, counterintuitively, the wealthiest individuals, who also profit the greatest from the relief bundles intended to pull citizens out of crises, particularly in the United States. This is an example of how adding petrol to a fire can make a bad situation even worse. This happened during the Global Recession that followed the economic collapse that took place in 2008-2009, and it is occurring once more during the present crisis caused by the coronavirus.
More educated billionaires have come to the realization that such enormous wealth concentrations are not just unfortunate news for a societal structure, but they are bad news for the rich as well. Both Warren Buffett and Bill Gates are proponents of increased taxes on the wealthy; however, the rates that they deem to be fair are not even close to being sufficient to close the gaping wealth divide that has surfaced, reconstruct our raggedy social safety nets, elevate the impoverished people out of poverty, or regenerate the environmental destruction that has been prompted by such extremes of riches.
One Alternative Would Be for Billionaires to Willfully Disinvest Their Holdings
Buffet and Gates have not only vowed to give away their wealth, but they have also founded the Giving Pledge, which is an initiative in which they inspire other wealthy individuals to also give away their fortunes. Even so, the reaction to the venture among the mega-rich, or what we like to speak of as wealth extremists, has indeed been mediocre at best, portraying a small drop in the ocean in comparison to the total riches billionaires control. Meanwhile, the wealth of those who have committed to the pledge is, on average, expanding at a rate that is significantly higher than the rate at which it is being reduced.
In addition, charitable giving is not a suitable replacement for fair taxation and equitable distribution of resources. It places the responsibility for what ought to be a collaborative judgment process on societal priorities in the hands of individuals who have not been elected and who might or might not be worried about the betterment of the world.
Furthermore, this enormous concentration of wealth provides billionaires with the kind of political influence that makes fun of the one-individual, one-vote principle that is the basis of democracy. We are accustomed to the fact that the business class in authoritarian and dictatorial regimes, such as those found in Russia or the Middle East, represents an influential oligarchy. In democratic systems, the massive propaganda power, both direct and indirect, of billionaires and multinational companies undercuts the will of the voting public and erodes democratic rule. What we need is not half-hearted attempts to make becoming a billionaire unfavorable; rather, what we need is to make it impossible to become a billionaire.
To Accomplish This, There Must Be a Concerted Effort Made on a Global Scale to Implement “Economics”
This can be accomplished through a variety of means, including enacting a real limit on wealth and incomes and incorporating a coordinated tax structure that is so advanced that there is no longer any motivation or potential to build up such enormous fortunes, or any combination of these.
This will have the effect of both narrowing inequalities and enabling societies all over the globe to rebuild and broaden their social safety nets. Additionally, it will make it possible to more adequately reward those who work in vital sectors that have been neglected. People will have the impression that the fruits of their labor will not simply be used to make fat cats fatter. In addition, this will make it more likely that people will innovate in ways that will benefit society.