Marc Steiner talks with Chuck Collins, one co-author of this report, about the global wealth concentration and its implications for instituting a global tax on wealth. Chuck Collins is the Director of the Program on Inequality & the Common Good at the Institute for Policy Studies. He also co-edits the IPS website Inequality.org. He is also the author Born on Third Base: One Percenter Makes the Case For Tackling Inequality and Bringing Wealth Home.

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Transcript

Marc Steiner: Welcoming to Marc Steiner's Show on The Real News. Marc Steiner: It's great to have all of you with me.

The wealthy have become more rich over the past decade, and COVID has ravaged this planet with its deadly vice, and the rest of humanity is losing or loosing control of the few financial resources we have. It's quite glaring. It's so glaring. How can we have a dialogue about what this all means?

We've invited Chuck Collins. He is the director of the Inequality and the Common Good program at The Institute for Policy Studies. Inequality.org is his co-editor. He also wrote Wealth Hoarders, How Billionaires Pay millions to hide Trillions. He is now one of the co-authors of the new study "Taxing extreme wealth: [An anual tax on the world’s multimillionaires or billionaires:] What would it raise and what it can pay for." This was done by Oxfam, Patriotic Millionaires, The Fight Inequality Alliance, and the Institute for Policy Studies. "Taxing Extreme wealth" is a detailed analysis of the people who control the world’s wealth. It includes billionaires and multimillionaires. They are undertaxed, with too much power, not paying their fair share. What's more? It looks at how paying your fair share could make a difference in the world. With a formula to achieve this. Imagine if there was a global wealth tax. Let's find out what we can do. Chuck Collins, you are welcome. It's good to see you again.

Chuck Collins: Marc, thank you for having me.

Marc Steiner: Let's go backwards for a moment for everyone listening or watching this podcast, and then let's get to the point about this report. Let's start with A. How you got together to do it and B. The overall findings.

Chuck Collins: Yes. We've been studying the wealth of billionaires in America, and the impact of the Pandemic on it, Institute for Policy Studies and Americans for Tax Fairness. As you mentioned, the US has approximately 750 billionaires. Their wealth has risen by $2 trillion in less than two years.

Marc Steiner: Trillion?

Chuck Collins: Two Trillion. The 750 now have $5 trillion. Oxfam, which is often done in conjunction with Davos World Economics Forum, does a kind of global billionaire analysis. We gathered with other international organizations to examine not only what was happening with billionaires but also what we can learn about ultra-high net worth people or those with more than $5 million and over $50 million. What could a wealth tax do to raise money if it were implemented in all countries around the globe?

That was the real exercise. One interesting point I will mention is that there haven't been any good data. Bloomberg and Forbes magazine do just-in-time calculations for billionaires who are super wealthy. We don't know much about the world below billionaire status. We went to Wealth-X, a private research firm whose clients were companies that sell private jets or yachts. They've done extensive research about the ultra-rich around the world. We teamed up with them to conduct a deeper analysis of the ultra-rich in 66 countries, representing 98% of the global GDP. We basically gathered data about most multimillionaires and billionaires around the globe and attempted to paint a picture.

Marc Steiner: I was shocked to read that in person in the report. I... I'm sorry. This is a quick reminder: Given that their clients include the wealthy, it's amazing that they cooperate with you.

Chuck Collins: We paid them, they hired their services, and we are sub-

Marc Steiner: [laughs] Okay, got it.

Chuck Collins: We have been subscribers to their database. We're customers. They also work with non-profit groups that are primarily interested in fundraising. They are as curious as us about certain questions. It was a match made in Heaven.

Marc Steiner: That's good. Before we dive into the meat of the implications of these two formulas, let's talk a little bit about them. What was the formula that you used to determine how and what tax you would impose and what it could mean?

Chuck Collins: We had a very thorough debate about how a wealth tax should look and what the goals should be. If you believe that billionaires should not exist and that wealth should be distributed to the poorest, then a progressive wealth tax would be a good idea. This will reduce that wealth concentration. We also considered the US proposal by Senator Elizabeth Warren, Senator Bernie Sanders for a wealth tax that would start at 50 million dollars and higher. We decided to test out several rate structures and formulas. We looked at two. One that I believe mirrored the US wealth-tax proposal, and another that would actually begin to chip away at billionaire global wealth.

Marc Steiner: Can you talk about the formulas? I want people to hear the numbers. Crosstalk: These are the two ways that you calculated what to do.

Chuck Collins: The first formula states that wealth between $5 million to $50 million would be taxed at 2%, wealth between $50m and $1billion would be taxed at 3%, wealth between $50m and $1billion would be taxed at 3%, and wealth above $1billion would be taxed at a 5% tax rate. The second rate structure stated that wealth exceeding $1 billion will be taxed at 10%. Some people suggested that we tax wealth over $1 billion at 10%. These were the formulas we used to calculate the world's wealth, as we saw it.

Marc Steiner: There are a few things that really struck me about this report. Before I go into details about the report, let me say that although we have heard of this before, this report gives credence to the fact that over the past few years, even with COVID, this planet has seen wealth rise and poverty fall. The gap is growing. People aren't aware, I think, of the depth of this gap.

Chuck Collins: In some ways, we have entered a period where there is hyperinequality. It started 40 years ago. In the late 1970s, wages began to stagnate in many capitalist countries. Then the income and wealth growth going to the top one percent was increasing. In the last 15 years, most of the wealth and income gains have not been just to the top 1 percent but also to the top 10th of 1%. When you look at the billionaire classes, you will see that a lot of society's wealth is being pooled there. This is the current trend. Then, of course, the pandemic hits. I believe these extreme income inequalities and wealth were similar to the pre-existing condition that led to the pandemic. The more you were economically vulnerable, the more deadly and dangerous the virus will be. This billionaire elite is enjoying a surge in wealth. We are just witnessing what I would describe as accelerating inequality over the past decades.

Marc Steiner: There are a few things that just leapt out at me, again. Let me ask you about two things before we go back to the Western hemisphere. I was really taken aback by them. There were two things. The first was that wealth surged by 47.3% in social democratic countries like Norway and Holland during the pandemic. The richest 0.1% had more wealth than the bottom 60% in Holland. It was very similar in Norway. It was shocking to me how this has affected all societies, even social democratic societies. They have in many ways more equality due to the healthcare system and the more housing they provide. It happened all over the globe.

Chuck Collins: Yes. Marc, I think it's an important point that you make that this is a global trend. This is how capital and the rewards that go to capital, investors, wealth holders, have soared around the globe. We are examining the pre-tax and pre-social policies for many of these countries. These inequalities have increased in Nordic countries. However, they will tax the wealth. Many of these countries have wealth taxes. They will do a better job slowing down and taxing the top as well as making investments to increase and maintain a high social floor. In the report, it is posted that we have 44 fact sheets about the countries where we had the most data and where activists were present.

You can go in and see specific countries, and the overall picture. The question is, then, what's the exhortation? What are the responsibilities of each country? How can we as a planet help them? These countries already do a better job at ensuring that those who aren't in permanent social inequalities don't get them.

Marc Steiner: It even affected countries people consider to be old-line socialists, Leninist states, communist nations. There are many, but inequality has increased in Russia and China. One thing that really stood out was the fact that 47 of China's richest billionaires have the same wealth as the lowest 10% of Chinese society. Although not as obvious as the other findings, it is still very noticeable.

Chuck Collins: Yes. We didn't have the vision. Yeah.

Marc Steiner: Right. Russia is also home to the richest 80 billionaires, who have more wealth than the bottom 80%. These are some amazing statistics. They speak volumes about the global growth in wealth and capital over the past 20 years.

Chuck Collins: Yeah, absolutely. This is why I believe this moment is a planetary one. We had a conversation earlier in fall about the Pandora Papers. This was the release that exposed this hidden wealth infrastructure. That's only part of the story. While we are focusing on the wealth we believe we can measure, there is likely even more treasure hidden away, hidden, or hidden. The global concentration of wealth is moving into a new area. In a way, it's a time when we as planets are at a crossroads. That's why we brought it up during the Davos discussion. We'll have to think about what we can do to address this. Wealth taxation is one of the most important solutions.

Marc Steiner: I'm going to discuss the solutions that you have all proposed in this report. And what do you think the reality would look like? Marc Steiner: Marc Steiner: I don't think that the idea of creating an international tax authority is possible. And I can see the US Senate, the British parliament, or any other international body saying, "No, you cannot do that." Talking about it in terms of those countries: I believe it's 130-136 countries who came together to pass a treaty on the global corporate minimum income taxes. We will see what it does. Talk about what you are proposing, and what that means for building momentum for this type of political discussion.

Chuck Collins: We wanted to see how wealth exists and what revenue can be generated if wealth taxes are applied by nations. If we used the first formula, it would generate almost two-and-a-half trillion dollars annually that could be used to vaccinate the world, reduce extreme poverty, and expand health systems. You are absolutely correct. The United Nations will not be a tax authority. As much as some right-wingers fear, there is not going to exist a global institution with tax authority over national states. It is more likely that multinational corporations have been pitting different countries in this race for the bottom, to see who will be the lowest corporate income tax, for the past couple of decades.

As you mentioned, 136 countries joined together to form a treaty. They set a minimum 15% income tax as a floor. While some countries will have higher corporate taxes than others, they basically say that this is a global problem and a global tax issue, and that they're going to set a standard. A parallel process could be used to tax wealth. Countries would say that extreme wealth concentrations are not good for their countries or the entire world. These are the places where large amounts of the world's wealth reside. Let's create a global minimum wealth tax policy, and get as many countries as possible to agree to this global floor. It's possible. This is in your lifetime. We are on the right track to achieving a global corporate minimum income tax.

Marc Steiner: Let's take it back to the States, where we broadcast for a second. This is a very detailed report that shows what could happen all over the globe. People know that the wealthiest people in America and around the world have a lot more wealth than the rest of us. One thing that really struck me was the fact that the richest billionaire in America - and we can talk about him shortly - has more wealth than the bottom 40%. This is huge when people understand that. These are just a few examples. Let's look at your formula again and see what an annual wealth tax would look like in the United States. How would you get to these two numbers if this tax was actually implemented?

On the one hand, it would be nearly $930 billion and on the other hand, if I recall correctly, it's about $1.3 trillion or more. This money could be used in this country to help end poverty, provide health care for the nation, address COVID and other issues. This would bring to reality everything Biden and others are fighting for in Congress. Let's look at what happened here, and how it can be used as an example for others around the globe.

Chuck Collins: I agree. $1 trillion, or almost $1 trillion in revenue, comes from ultra-rich people with substantial wealth. This is just a demonstration of the revenue potential for a wealth tax. Marc, you also made a point about the wealthiest billionaire and the poorest 40%. We are highlighting that the 20% of the poorest have either zero or very little wealth. One in five households doesn't have a savings cushion. The 20% remaining households have little to no savings. It is possible for one person, with a wealth that exceeds the bottom 40%, to have more than the bottom 40%. But the bottom 40% only has 40%. That is one aspect of what you can do. You can also imagine taxing the top to invest in things that would increase the floor and create opportunities.

We have the Build Back Better legislation, which has been effectively blocked in the US Senate. However, there were many things there. Expanding the child tax credit was almost like a guaranteed income to low- and middle-income households with children. It was a small monthly income infusion, which was paid for with progressive taxes. It could have been funded by taxing the rich. These are the kinds of things that we could tax the wealthy to invest in. Eliminate student debt. Permanently affordable housing that isn't more than 25% of monthly incomes can be created. These are just a few of the things that could reduce this gap. It is one way we could make a real difference. It's not only about the revenue. It's also about the power. As my coworker Sam Pizzigati says, taxing wealth should not only be about revenue. It should also help to reduce the oligarchic fortunes to a democratic size.

Marc Steiner: It's great, I love it. That's a great line. That's a great line. You can repeat that once more.

Chuck Collins: Cut these oligarchic concentrations down to democratic size. It is hard to believe that certain people could have such wealth and power. They also have the power to control media outlets, own huge monopoly businesses, etc.

Marc Steiner: I think one thing that struck me in all this - and we can just talk about it for a moment before we close – is that there is a way for us to start to address and improve the problems that affect billions of people around the world, and millions in this country. A more equitable tax system that taxed wealth would be a better option. If you think about it, taxing wealth in the same way as you describe would not make wealthy people poor. However, it would improve the lives, wealth, and well-being of all people across the world if it was done globally. This is the key point. It's not as if you are taking something away, and the poor man will have to sell his house. It can mean something completely different.

Chuck Collins: Yes. Chuck Collins: Yes. A 3% wealth tax for someone who has $50 million or more won't fundamentally alter their lives. However, if we all put in place a wealth tax similar to what we describe, it could produce huge resources that will just lift up and improve everyone's quality of life. It will be better for everyone, even billionaires, as everybody will live in a more equal and healthy society. It will be easier to manage economic volatility and polarization. This will also be good for democracy. In the US, we have the proposal for an annual wealth tax, similar to the one Senator Warren or Senator Sanders proposed. Senator Wydne also proposed a Billionaire Income Tax, which would tax unrealized gains and capital gains. The estate tax, an inheritance tax that has been deemed laughable, is another. It has become so opaque that most ultra-wealthy people opt out using trusts or other mechanisms.

We can also shore up the inheritance tax but it's only a one-time tax at death that is very important. Then we need to implement an annual wealth tax. We have a more balanced tax system, where the super-rich pay their fair share of income taxes and other taxation.

Marc Steiner: This report was put out by the Institute for Policy Studies with their partners. It is called "Taxing Extreme wealth: An annual tax for multimillionaires and billionaires around the world: What it would raise, and what it could fund for." It stimulates your brain about what you could do and how to get people to use this tool as a political tool. Let's talk about accessing this report, Chuck.

Chuck Collins: Yes. It's easiest to visit Inequality.org. This is a website I co-edit at Google Institute for Policy Studies. It can also be found at Oxfam International, Fight Inequality, and the Patriotic Millionaires. These four groups came together. The Patriotic Millionaires organized several hundred multimillionaires as well as billionaires to support the tax wealth message. That's the part of the coalition. This includes some of those who were required to pay the tax. You can check out the full report and also see the country-by-country fact sheets. It's quite interesting. New data has emerged about the United States. There are 63,000 households and individuals who have at least $50 million. We know that there are 750 billionaires. But, just thinking about how little wealth exists is part of this project.

Marc Steiner: If you could do this before we move out of here, the number you just gave to us was taxed at, let's say, the top of your proposals. What would that bring the country?

Chuck Collins: The proposal was to tax the 63,000 households or individuals at a rate of 3%. There are approximately 1.4 million households that have $5 million or more. Tax those people at 2% and the billionaires at 5.5%. Again, if those were done, a wealth tax that was taxed at these levels would raise $930 million a year. It would bring in $1.4 trillion annually if billionaires were taxed at a 10% rate. That's enough wealth to pay for the entire Build Back better proposal, which was in debate at the end. It was worth $2 trillion. This wealth tax could pay for most of it.

Marc Steiner: That's something to chew on and reflect upon. You can download a copy of the report by visiting Inequality.org. It is worth reading this report to see the truth of our situation and to begin to think about how we can make it a topic of public discussion and a part of political reality that we can fight for. Chuck Collins, once again, thank you for all of your hard work. We are grateful that you were able to join us today. It's always a pleasure seeing you and talking to you. We'll keep looking at it and let's make some trouble. We are grateful.

Chuck Collins: Thank you Marc. Thank you for being here.

Marc Steiner: I'm grateful to you all for being here today. Please let me know your thoughts about what you heard and what topics you would like us cover. Send me an email at [email protected], and I will get back to you. You can also visit Inequality.org for a copy the report called "Taxing Extreme wealth." Also, Bill Fletcher Jr. will be producing a series about the rise of right-leaning parties and how we can stop them. Keep an eye out for it in March. This is an important battle and we must keep our eyes on it. Marc Steiner is Marc Steiner. Keep listening and stay involved.

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By: Marc Steiner
Title: ‘Hyper-inequality’ exploded during the pandemic; without a global wealth tax, it will become permanent
Sourced From: therealnews.com/hyper-inequality-exploded-during-the-pandemic-without-a-global-wealth-tax-it-will-become-permanent
Published Date: Thu, 27 Jan 2022 22:59:16 +0000