Latin America has 98 billionaires with a wealth of US$480.8 billion

Latin America has 98 billionaires with a wealth of US$480.8 billion
Latin America has 98 billionaires with a wealth of US$480.8 billion

By Leonel Ibarra -revistaeyn.com

The polarization of wealth in Latin America and the Caribbean is a situation that reflects that this high economic inequality It gives a small group of the ultra-rich the ability to significantly influence politics, affecting the rights of the majority and undermining democracies, according to Oxfam’s report “Econonuestra: It’s time for an economy for all.”

This phenomenon that benefits large corporations and the richest, It undermines guarantees of employment and prosperity and disproportionately affects women, youth, and indigenous and Afro-descendant communities.

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According to the report, Latin America and the Caribbean is the region of the world in which there is the greatest polarization between the wealth that is concentrated the richest 1% of the population and that which is in the hands of the poorest 50%.

In 2022, the richest 1% of the region concentrated almost 43.5 of every US$100 of total wealth, while the poorest half of the population as a whole concentrated only 0.8 of every US$100. This means that the small group of the richest people in Latin America and the Caribbean hoard 55 times more wealth than the poorest half of the region. Over the past 25 years, the richest have remained just as rich, while the poorest have remained just as rich. the poorest half has become poorer.

As of January 2024, there were 98 billionaires in the region, with a combined wealth of US$480.8 billion, an amount similar to the annual GDP of Chile and Ecuador combined.

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The two richest men in the region have more wealth than the poorest half (334 million people). Since 2000, the combined fortunes of the billionaires has increased by 368%almost six times faster than the growth of the economy in the region. This is equivalent to US$43.7 million a day or US$306 million a week.

A worker earning the average minimum wage in the region would have to work 90 years to earn the same as the average Latin American billionaire earns in a single day.

POVERTY

In contrast, in 2023 Poverty reached 29.1% (183 million people) and extreme poverty, at 11.4% (72 million people). This means that extreme poverty is at levels higher than in 2010 and that there are currently 2.9 million more people in this condition than before the pandemic.

Latin American and Caribbean tax systems collect little in an unfair way and favour those who have the most. Total tax collection in the region has grown by just 1.7 percentage points of regional GDP in the last ten years. It went from 20% in 2010 to 21.7% in 2021.

That is, the collection is 10.7 percentage points less than the average of OECD economies. This gap represents US$544 billion annually that are not invested to combat poverty and guarantee the rights of people in the region.

TAX COLLECTION

This meager growth in revenue has come at the expense of those with the least. While half of revenue comes from consumption taxes that disproportionately affect lower-income households, revenue from corporate profits and capital gains taxes has fallen by the equivalent of 0.06 percentage points of regional GDP between 2010 and 2021.

The contribution of direct taxes ((income and property) has remained virtually constant between 2005 and 2021, well below its revenue-generating potential compared to OECD countries. Only five countries have net wealth taxes and only nine have inheritance, estate and gift taxes. Capital income has on average effective rates below labor income.

This unfair tax collection pattern causes The richest 1% in the region pay proportionally less taxes than people in the bottom 50%. Therefore, our tax systems not only do not help to reduce inequality gaps, but on the contrary, they increase them.

Oxfam proposes tax reforms which have the potential to raise an amount representing 4% of the regional GDP. This amount, estimated at US$264 billion, would be used to combat inequality and finance essential public policies. This is a bold step towards a future where every individual has the opportunity to prosper and where economic justice is not just an ideal, but a possible reality.

 
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