When billionaires are wealthier than ever before, making cuts to public services that will penalize low- and middle-income people to pay for the costs of the COVID-19 pandemic is obscene.
Ottawa (16 Oct. 2020) — While most of the world’s population is struggling to get by, the very wealthy are now richer than ever before. According to a report from UBS, a multinational bank based in Switzerland, the holdings of the world’s billionaires are now worth US $10.2 trillion, or about C$13.56 trillion. This is higher than the previous record of US$8.9 trillion.
That wealth is held by a miniscule fraction of the world’s population. Of the 7.8 billion people in the world today, only 2,189 are billionaires. While we talk about the 1% or the 0.1%, this group is 0.0000003%. But they are being allowed to amass a shockingly high amount of the world’s wealth.
Billionaires increased their wealth during the COVID-19 pandemic
For the overwhelming majority of the population, the COVID-19 pandemic has been nothing but bad news. Even if people haven’t lost someone close to them, they often know someone who has. Many people have seen their incomes drop or disappear during the pandemic. Almost all of us know someone who is struggling to get by or we ourselves are struggling to get by.
But for billionaires, the pandemic has been an opportunity. Between April and July, billionaires saw their wealth increase by 27.5%.
Billionaires getting richer, because they already have lots and lots of money
Organizations that cater to the very wealthy usually try to peddle the myth that billionaires have done something to deserve owning an outrageous share of the world’s wealth. UBS is no exception.
Commenting on the report, Josef Stadler, a UBS executive, claimed that the strong nerves and “significant risk appetite” were what allowed the very wealthy to amass trillions of dollars during the pandemic because they increased their stock holdings when share prices were low. That's simply not accurate.
Most people know that the best time to buy something is when prices are low. What separates billionaires from the rest of us is that they have spare cash sitting around during a crisis. If billionaires had been worried about how to pay for costs like food and shelter, they wouldn’t have been increasing their stock holdings, no matter how tempting the prices were.
Time for tax fairness
What the report points to is the need for measures to make the tax system fairer. When billionaires are wealthier than ever before, making cuts to public services that will penalize low- and middle-income people to pay for the costs of the COVID-19 pandemic is obscene. Measures to make the tax system fairer can simultaneously help pay for the cost of the pandemic and reduce income inequality –— particularly if they are accompanied by measures to make it easier to crack down on the use of tax havens and other tax-avoidance schemes.