Oxfam, an organization fighting poverty, said on Monday, as the World Economic Forum’s annual conference got off, that food firms making large profits as inflation has risen should be subject to windfall taxes to help reduce global inequality.
That is one of the concepts presented in a report by Oxfam International, an organization that has worked for ten years to bring inequality to the attention of the political and commercial elites gathered in the Swiss ski town of Davos.
The report, which aims to spark discussions on panels featuring corporate and political leaders this week, claimed that despite the world being plagued by multiple crises—including climate change, rising living costs, Russia’s conflict in Ukraine, and the COVID-19 pandemic—the richest people in the world have become even wealthier and corporate profits are rising.
According to Oxfam, the world’s super-rich 1% has amassed almost twice as much wealth in the last two years as the remaining 99% put together. Meanwhile, at least 1.7 billion employees live in countries where inflation is surpassing their pay growth, even while billionaire fortunes are expanding by $2.7 billion a day.
Oxfam advocated for increased taxes on the wealthy to address these issues, including the implementation of one-time “solidarity” taxes and an increase in the minimum tax rate for the wealthiest taxpayers. Elon Musk, the wealthy CEO of Tesla, had a genuine tax rate of slightly over 3% from 2014 to 2018, according to the group.
As the price of oil and natural gas skyrocketed last year as a result of Russia’s conflict in Ukraine, straining household budgets all around the world, several governments have begun taxing the unforeseen gains made by fossil fuel businesses.
To help close the growing wealth disparity, Oxfam seeks to expand the concept to include large food firms.
The executive director of Oxfam International, Gabriela Bucher, stated that “the number of billionaires is increasing, they are getting richer, and also very huge food and energy firms are making enormous profits.”
In an interview with reporters, Bucher stated, “What we’re arguing for is windfall taxes, not only on energy firms but also on food industries to end this crisis profiteering.”
According to a report by Oxfam, affluent firms are using the conflict as a justification to raise prices even further. According to the group, oligopolies with a small number of dominant firms may maintain high prices since there is little to no competition in the food and energy sectors.
At least one nation has already taken action. Portugal imposed a windfall tax on significant food sellers, such as supermarket and hypermarket chains, as well as energy firms. It became effective at the beginning of January and will remain in effect through 2023.
Profits that are at least 20% more than the average of the prior four years are subject to a 33% tax. The money raised is used to support small food shops and welfare initiatives.
According to Oxfam, an analysis of 95 businesses that experienced windfall profits revealed that 84% of these profits went to shareholders while higher prices were passed on to customers.
