The Rise of the Super-Rich: The Increasing Gap between Poor and Wealthy

The pandemic and the explosion of wealth: Who profits, and who loses?

The Corona pandemic has made the rich super-rich, and at record speed. For the first time in 25 years, extreme wealth and extreme poverty have increased again. The world's five richest men, Elon Musk, Bernard Arnault, Jeff Bezos, Larry Ellison, and Warren Buffet, have more than doubled their wealth since 2020 - while they had 405 billion US dollars at their disposal in 2020, they can now rejoice the increase of their wealth to 870 billion. Due to the extreme rise in food and energy prices in 2022, billionaires have become even richer - 95 percent of global food and energy companies have more than doubled their profits in 2022, earning 282 billion euros, while the majority of people did not know how to pay for food and energy.

Impoverishment and inequality: Who counts as the losers?

So, the rich are getting richer and the poor? Yes, they are getting poorer again - over the same period since 2020, hundreds of millions of people worldwide have slipped into extreme poverty. But who is considered poor? Measuring poverty is difficult, everyone perceives poverty differently. According to the World Bank, people are extremely poor if they have less than $ 2.15 a day at their disposal. And who is considered rich? Where wealth begins is not scientifically well-defined. But what's clear is that wealth is primarily male. Poverty, on the other hand, often affects women because they frequently work part-time and are employed in traditionally low-paid female professions.

Taxes for the Super-Rich: A Controversial Topic

When dealing with the discrepancy between the rich and the poor, we can't ignore the issue of wealth tax. In practical terms, this means that those who earn more should also pay higher tax rates - this is currently the case only in Norway, Spain and Switzerland within the EU. According to a study, the implementation of a wealth tax could generate 2.5 trillion dollars worldwide. A possible model could involve a two percent tax on wealth over five million US dollars, three percent on wealth over 50 million US dollars, and five percent for wealth exceeding one billion US dollars. Applying this model to Germany, for instance, could give the state an annual sum of 93.6 billion US dollars. Approximately 200,000 people would be affected by such a wealth tax, merely 0.24 percent of the population.

The Economic Consequences of a Wealth Tax: A Double-Edged Sword

The question initially posed continues - how does one measure wealth? Do jewelry and antiques count just like savings accounts or securities? Who determines when a person, for example, owns a million euros? What are the costs and efforts associated with determining this value? You would need an army of civil servants to examine it, who would need to be paid - possibly out of the wealth tax? The deterioration of tax conditions for companies might lead to them having to reduce costs and investments in order to manage the increasing tax burden. Worst-case scenario: companies could migrate abroad to minimize their taxes. In short: implementing a wealth tax would compromise investment power, jobs and local economies. Experts even believe that no tax could be more economically harmful.

Wealth by Tax Breaks: Myth or Reality?

Opponents of wealth tax argue that nowhere in the world has the population become richer by means of wealth taxes. The middle class, which is increasingly shrinking due to social decline, should be strengthened, critics say, and the poor helped to achieve social advancement. Their reasoning is simple: "Those who want more fairness should cut taxes, not raise them - that's the only way to accumulate wealth".