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Billionaires' wealth soared during pandemic as millions fell into poverty

  • 7 Dec 2021

The world is becoming "even more polarised" as billionaires' wealth rose by more than $4 trillion during the Covid-19 pandemic, while over 100 million joined the ranks of "extreme poverty".

Europe was the world's most equal region in terms of the distribution of wealth, whereas the Middle East and North Africa was the most unequal. ( Reuters )

The share of global wealth of the world's richest people has soared at a record pace during the Covid pandemic.

Since 1995, the slice held by billionaires has risen from one percent to three percent, the World Inequality Report showed on Tuesday.

"This increase was exacerbated during the Covid pandemic. In fact, 2020 marked the steepest increase in global billionaires' share of wealth on record," the document said.

The club of the richest one percent has taken more than a third of all additional wealth accumulated since 1995, while the bottom 50 percent captured just two percent.

The world's 52 richest individuals have seen the value of their wealth grow by 9.2 percent per year for the past 25 years, well above less wealthy social groups, according to the report.

"While the wealth of billionaires rose by more than $4 trillion (3.6 trillion euros), 100 million more people joined the ranks of extreme poverty," said Lucas Chancel, co-director of the World Inequality Lab at the Paris School of Economics, noting that extreme poverty had been previously falling for 25 years.

The report also showed that women's share of total global income from work was less than 35 percent, up from near 30 percent in 1990, but short of parity with men.

READ MORE: Viral inequality: Billionaires gained $3.9tn, workers lost $3.7tn in 2020

'Exacerbated inequalities'

A real-time ranking by Forbes magazine shows that the top 10 richest people each have a net worth exceeding $100 billion, with Tesla boss Elon Musk on top with around $265 billion.

"After more than 18 months of Covid-19, the world is even more polarised," said Chancel.

Europe was the world's most equal region, with the richest 10 percent taking 36 percent of the income share, whereas the Middle East and North Africa was the most unequal as the wealthiest 10 percent of society took 58 percent of income.

Chancel, the study's lead author, said state intervention was crucial in the fight against poverty but that wealthier nations were able to act more during the coronavirus pandemic.

The 228-page report, whose contributors include French economist Thomas Piketty, calls for a "modest progressive wealth tax on global multimillionaires" in order to redistribute wealth, along with measures to prevent tax evasion.

It added that today's taxes excessively target property and should instead include all forms of wealth, particularly financial assets, which make up the core of modern fortunes.

The authors also recommended the creation of an international financial register to allow authorities to monitor taxpayers' assets and capital income and reduce tax evasion.

READ MORE: Top 1 percent of households own 43 percent of global wealth

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