fighting for a more equal world Max Lawson fighting for a more equal world

A Broken Economy

Inequality and Growth- Malawi

‘Economics is the method. The object is to change the soul’ The Capture of Ideas Market society. Individualism. Everything for sale. ‘Economics is the method. The object is to change the soul’

The Capture of Politics

Decent work and Inequality

Rewarding wealth, not work

The Power of Public Services to reduce inequality

h Connecting this to the last point made in the previous slide: One of the best ways to stop expectant mothers dying is to make sure that midwives or other skilled health professionals are there when they give birth. Our estimates, based on DHS data, suggest that in developing countries more successful at making sure the majority of poor women give birth with the support of a heath professional, this has been achieved overwhelmingly by public sector provision of care. In these developing countries doing the most to stop poor women dying in childbirth, 90% of the care that is provided comes from the public sector, and 8% comes from the private sector. (see Figure 8). [Oxfam Methodology Note] h

Inequality and Tax

Inequality and Tax h Visualising what discussed on the previous slide: Governments in developed countries have been reducing both the top rate of personal income tax and the rate of corporate income tax over the long term. The top rate of personal income tax in the US was 94% in 1945, and as recently as 1980 it was 70%. Today it is almost half that, at 37%.393. In developing countries, the average top rate of personal income tax is even lower, at 28%, and for corporate tax it is 25%. The breakdown of tax revenues based on Oxfam calculations (data available for 35 OECD and 43 non-OECD countries for 2015) shows what mentioned on the previous slide, i.e. only 4% of the total tax revenues for the considered countries comes from wealth taxes. [OECD Stat. Revenue Statistics – OECD countries: Comparative tables] h

Paying for public services and social protection We can afford universal public services and social protection for everyone: tax, corruption, debt and aid. The richest individuals and corporations do not pay their fair share of tax. Top rate of personal income tax in the US dropped from 94% in 1945, to 70% in 1980, to 37% today. Wealth is particularly undertaxed. Only 4% of tax revenue comes from taxes on wealth. Tax evasion, tax avoidance and tax competition are big barriers to ensuring that the rich pay their fair share On the issue of how to pay for public services and social protection Contrary to what often thought, we can afford universal public services and social protection for everyone. However, for this to happen the richest individuals and corporations should pay their fair share of tax. This is currently not happening. An example of this is provided by the top rate of personal income in the US: such rate was 94% in 1945, and as recently as 1980 it was 70%; today it is almost half that, at 37%. [T. Piketty. (2014). Capital in the 21st Century] On the top of that, wealth turns out to be particularly undertaxed: only 4% of tax revenue comes from taxes on wealth (as the graph on the next slide shows) The biggest barriers to ensuring that the rich pay their fair share are currently represented by tax evasion, tax avoidance and tax competition. With respect to tax evasion, it is estimated that the super-rich are hiding at least $7.6 trillion from tax authorities and dodging an estimated $200bn in tax revenues. [G. Zucman. (2015). The Hidden Wealth of Nations] h

What does this mean for us? Inequality is destroying our societies It is driven by the capture of politics and neoliberal ideas about economics Solutions to the inequality crisis are clear: Fair wages. Public Services. Fair taxation. A core part of this solution is making corporations and rich people pay their fair share of tax. To do this we must campaign! We have to fundamentally change our approach.