World Inequality Report 2022

Context

  • World Inequality Report 2022 was recently published by the World Inequality Lab at the Paris School of Economics.

Key Findings of World Inequality Report 2022

  • It measures income and wealth inequality in a systematic and transparent manner.
  • This report showcases inequality across the world, providing a comparative perspective across countries. World Inequality Report 2022
  • Global minimum corporate tax rate is progressing but is still below the statutory rate.
  • Tax ranging from 1% of wealth owned over $1 million to 3 % for global billionaires can generate 1.6 per cent of global income.
  • Average increase in the wealth of billionaires is over 9 % per year.
  • 15 % minimum corporate tax deal is very low as compared to the statutory tax rate paid by low-end and middle-size companies/corporations.
    • Recently, at a meeting under the Organisation for Economic Co-operation and Development (OECD) finalized that Multinational Enterprises (MNEs) will be subject to a minimum 15% global tax rate from 2023.
    • It aims to make it harder to avoid taxation by MNEs.
  • 15 % minimum corporate tax would lead to revenue gains
    • €83.3 billion in EU,
    • €57.0 billion in US,
    • €6.1 billion in China
    • €0.5 billion in India.
  • Women make just a 3rd of global labour incomes.
    • The share of female incomes in global labour incomes was 31 per cent in 1990 and nears 34 per cent in 2015-2020 and males make the remaining 66 per cent.
  • In terms of global carbon emissions, the bottom 50 % of the population is responsible for 12 % of world emissions
  • The 10 % highest emitters are responsible for half of world individual emissions.
  • The global bottom 50 per cent income share remains historically low despite growth in the emerging world in the past decades. The share of global income going to top 10 per cent highest incomes at the world level has fluctuated around 50-60 per cent between 1820 and 2020 (50 per cent in 1820, 60 per cent in 1910, 56 per cent in 1980, 61 per cent in 2000, 55 per cent in 2020), while the share going to the bottom 50 per cent lowest incomes has generally been around or below 10 per cent (14 per cent in 1820, 7 per cent in 1910, 5 per cent in 1980, 6 per cent in 2000, 7 per cent in 2020).
  • The top 0.1 per cent of the global population captures more income than the entire bottom 50 per cent.
  • The average annual wealth growth rates among the poorest half of the population were between 3 per cent and 4 per cent per year between 1995 and 2021. The poorest half of the world population only captured 2.3 per cent of overall wealth growth since 1995.
  • The top 1 per cent benefited from high growth rates (3 per cent to 9 per cent per year).
    • This group captured 38 per cent of total wealth growth between 1995 and 2021. The share of wealth detained by the world’s billionaires rose from 1 per cent of total household wealth in 1995 to nearly 3.5 per cent today.

Source: IE.

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