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Blinded by inequality: global elites, their inheritances and the low tax burden

Blinded by inequality: global elites, their inheritances and the low tax burden

Inheritance. That seems to be the key to success. At least for the global elites, the rich who dominate the world. At least that’s what it indicates A recent report published by Forbes magazine, which maintains that more than a thousand tycoons are expected to pass on more than $5.2 trillion to their heirs in the coming years.

In this sense, Shumpetere’s logic, of innovation for growth and subsequent accumulation, is languishing slowly. I am rich because my ancestors are. And the truth is, it is not necessary to ‘break my back’ much. Being alive to maintain what I have, joining the executive management of family businesses. Trusted legal and accounting studies friends, some technical financial knowledge. And not much more. Ambition? Fine, thanks. To enjoy the ‘loca life’.

Concerns? What is new about the report is the relevance they give to artificial intelligence: While 65% consider that it will be one of the best commercial opportunities for their businesses in the future, 58% also observe that cybersecurity and hacking threats increase as technology gains prominence. In this regard, it was obvious that their concern was not going to be the massive loss of jobs. Could it be that, in the transition towards a new form of global production, they trust too much in the new jobs that are being created? I don’t think they think about it too much.

The most interesting thing, like the system itself, is individualism –not to say egocentrism-, of those who have limited empathy with the rest of the world: the 68% of first-generation billionaires stated that philanthropy was an important part of their legacy, compared to only 32% of the heir generation.

And the worst of all is that, neither with their own incentive nor with that of others, they collaborate with the most disadvantaged. The thing is billionaire businessmen increasingly have to face fewer taxes throughout his life. If not, let’s look at corporate taxes, which have decreased significantly in OECD countries in recent decades, from 48% in 1980 to 23.1% in 2022. Another example: Half of the world’s billionaires live in countries where the inheritance tax on money given to children has ceased to exist. In concrete numbers, about $5 billion of these men and women will pass on to the next generation tax-free. Of course, with avoidance (and why not evasion) as workhorses. And it should be noted that this is not by divine design: Inequality is driven by elites who wage a sustained and highly effective war on taxes.

Did nothing happen with the report published in October of last year by the European Union Fiscal Observatory, which recommended a global tax for the world’s 2,700 billionaires? According to the organization, a tax of this type would raise $250 billion a year. A lot of money that would be used to alleviate hunger in the world; as would also be transferring money from global military spending to medical research to fight endemic diseases, among others. No, that would mean asking too much for outdated ethics. Everything is too moral, let’s see if we can think of putting the human being and the environment before accumulation.

That is why it is not surprising that the report just published by the prestigious organization Oxfam, in which it indicates that while the five richest men in the world more than doubled their fortune from 2020 to 2023 (from $405 billion in 2020 to $869 billion last year), nearly five billion people around the world became poorer in the same time period. The increase in global inequality, with the richest people and companies accumulating greater wealth – thanks to the increase in stock prices and also by having greater lobbying capacity – can only lead us to one conclusion: corporate power is used to drive inequality.

On the one hand, it squeezes workers and enriches rich shareholders, avoiding taxes and privatizing the state. But also, by action or omission, Governments empower huge capitals to enhance monopolistic practices, giving them such power that allows them to influence the wages paid to people. (according to a study by the World Benchmarking Alliance on the 1,600 largest companies in the world, only 0.4% of them publicly commit to paying their workers a living wage, and to advocate for this fair measure in their value chains ), in the prices of food and medicines that people can access. Finally, these economic elites also relentlessly push for lower interest rates in the financial system, less transparency in accountability processes, and other measures aimed at allowing their corporations to contribute as little as possible to the public coffers.

How can we do then to stop changing a reality where the growing power of large companies and monopolies has become a machine for generating inequalities, workers are squeezed, aggressive tax avoidance schemes are put together, services are privatized? and climate collapse accelerates, channeling enormous amounts of wealth towards its already ultra-rich owners, which in turn implies undermining democracies and the rights of the majority?

Study, read the classics, allow yourself to doubt. Think carefully about who defends your interests. Go with conviction to the ballot box. Don’t resign yourself to living in such an imperfect world. And requests for those who govern us? Two main issues: 1) do not lie and do what you promised 2) do not be afraid or complicit with the great powers that be, the ‘true caste’, as they say these days. Because remember, ‘God vomits out the lukewarm’. And without a true revolution, structural dilemmas become entrenched and only lead to an agonizing prolongation of those who have never seen – nor will their children or grandchildren – a light at the end of the tunnel. Where, in the meantime, the economic elites that dominate the world continue to enjoy looking at their own navel.

Economist and Doctor in International Relations. Twitter: @KornblumPablo

Source: Ambito

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