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World's Wealthy One Percent Highlights Extreme Inequality

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According to new figures out last week from Credit Suisse, the richest 1% of the world's population now owns nearly half of the entire world's wealth. That is worth repeating. One percent of the world's population own half of the world's wealth. Meanwhile, the poorest people on earth, who constitute two thirds of the world's population, own just 3% of the world's wealth. This is clearly nuts.

This hasn't happened overnight. The global disparity between incomes has been spiralling out of control over the last few decades. In 20 years, the share of national income going to the most affluent 1% of Americans has doubled. And as countries' economies grow the gap is getting wider. In China the richest 10% are now taking home nearly 60% of the nation's income, putting Chinese inequality levels almost on a par with those of South Africa, which is one of the most unequal countries on earth. Inequality in South Africa is significantly worse than at the end of Apartheid.

The economic crisis has accelerated this process, making things worse, with the richest people increasing their incomes since the crash, whilst the wages of ordinary people have fallen. Bankers and those working at the top of the financial sector have done particularly well.

A report last week revealed that Africa now has at least 55 billionaires. Just 55 people with a combined wealth of £89billion, in a continent where over 400million people are living in extreme poverty - earning less than 80 pence a day. And you can guarantee that most of that money is sitting safely in Zurich, not being used to fight poverty in Zambia.

It's not just the poorest countries where those with the most seem to have an unfair advantage. In the UK, whilst austerity measures are forcing ordinary families into foodbanks, the highest earners have had the biggest tax cuts of any country in the world.

Some feel extreme inequality is the price you have to pay for economic growth. This is false. In fact these levels of extreme wealth are deeply economically inefficient. If that wealth were more evenly spread, then this would create much more demand in the world economy which would be a big boost to growth. When the majority of people are seeing their wages stagnate or decline, or are facing the unemployment line, this harms the economy as no one has money to spend. The world economy cannot be supported on sales of super yachts to the 1 per cent.

G20 governments, and especially the UK and US, need to do more to fix the system. They need to make the richest pay their fair share of taxes. To do this they need to raise taxes for those at the top and put an end to the secrecy which allows companies and individuals to siphon their cash into offshore accounts. How can it be right that a cleaner in Canary Wharf pays a much higher effective tax rate than the billionaire bank bosses on the top floor?

Global action to tackle tax dodging by multinational corporations could save developing countries an estimated £100billion a year - more than four times the amount spent on health care by all the governments in Sub-Saharan Africa combined. In countries where children die needlessly from easily curable diseases this money would make a real difference. It's time the world really commits to putting people's lives before profits.

This rapidly rising extreme inequality is not necessary. Clear steps can be taken to reverse this trend, and bring an end to extreme wealth. Countries like Brazil for example have in the last decade managed to grow their economies whilst making them more equal. The richest should pay their fair share in tax, and this money should be spent on public services and creating decent work for ordinary people. The public is sick of hearing about more and more money going to the handful of people, (mostly men) at the top. The balance needs to be tipped in favour of the 99 per cent and not for the 1% who have the most.

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