As the world emerges from the COVID-19 pandemic, one clear trend is that billionaires have continued to accumulate wealth while others have suffered through severe economic consequences. Globally, the world’s 2,755 billionaires have seen their combined wealth rise an astounding 68% since the start of the pandemic, growing from a combined $8 trillion USD in March 2020 to over $13.1 trillion USD. This unprecedented gain took place during a pandemic that unleashed widespread suffering across the world. Given the severity of the negative impact COVID-19 had on the global economy, it is imperative that governments around the world enact policies to combat wealth inequality. 

While over the past two years billionaires have seen unprecedented gains to their fortunes, for most, the pandemic was in no way a windfall, but rather a crisis that exacerbated existing issues. Perhaps the most heartbreaking example of this pattern is the spike in global hunger caused by COVID-19. A recent OXFAM study suggests that the COVID-19 pandemic has pushed global hunger to dire levels. In fact, estimates suggest that the pandemic has caused a six-fold increase in global hunger and malnutrition, with an average of 11 people dying per minute globally from acute hunger, which is higher than the estimated pandemic mortality rate of 7 people per minute. In addition, over 155 million people globally are now living under crisis levels of food insecurity and 811 million people are undernourished. This horrific rise in global hunger is a true humanitarian crisis and has taken place alongside a few thousand people seeing their fortunes skyrocket. 

This unequal distribution of pandemic-related economic consequences is evident within a number of areas. While global billionaires saw their wealth increase by $3.9 trillion USD, the International Labour Organization estimates that workers around the world lost a combined $3.7 trillion USD in earnings as the pandemic wreaked havoc on the global economy and millions lost their jobs. Notably, this trend is even more pronounced within developed countries. In the United States, 745 American billionaires have seen their wealth grow by $2.1 trillion since the start of the pandemic, a 70% increase. At the same time, approximately 22 million Americans lost their jobs during the pandemic, and countless more suffered further economic impacts of the pandemic. One shocking fact is that in the United States, the richest three men hold more wealth than the bottom 50% of Americans. This trend is even more shocking on a global scale, with 2750 people owning more wealth than half of the world’s population–3.8 billion people. This grotesque concentration of wealth has no moral justification and is a trend that will only worsen in coming years. It is past time for governments around the world to enact policy targeted at reigning in wealth inequality. 

One of the most impactful policy ideas to combat wealth inequality would be a wealth tax. A wealth tax involves taxing an individual once their net worth (assets minus liabilities) reaches a particular threshold. Several European countries already have some form of a wealth tax, though the specifics vary by country. For example, Norway, Switzerland, and Spain have comprehensive wealth taxes that levy a tax against all types of assets, while countries like France and Italy only tax certain types of assets, like real estate. Taxing those who can most afford it is an effective mechanism for increasing government revenues to pay for essential services. Though a marginal tax on excess wealth cannot solve the problem of wealth inequality, it is undoubtedly a step in the right direction.

In North America, the idea of a wealth tax has gained traction in recent years as progressive politicians in both countries have championed the idea of a wealth tax. In Canada, NDP Leader Jagmeet Singh campaigned on instituting a wealth tax on Canadians with more than a $10 million net worth. Under his plan, individuals possessing a net worth over the $10-million threshold would face a one-percent tax on all wealth owned above that threshold. Others in Canada have proposed a one-time wealth tax on households with over $20 million. According to the Parliamentary Budget Office, such a plan could yield $60 billion in revenue for essential services. In the United States, politicians like Bernie Sanders and Elizabeth Warren campaigned on a similar wealth tax during the 2020 presidential election, and have remained vocal proponents of it ever since. Under Elizabeth Warren’s recent proposal, households with over $50 million USD would face a 2% yearly tax on their assets, while billionaires would face a 3% yearly tax. If implemented, the new taxes would affect less than 100,000 Americans, yet raise over $3 trillion in revenue over the next decade. 

If taxing a small number of households a relatively small amount (compared to the size of their fortunes) can generate large amounts of revenue that would hopefully benefit the rest of the population, implementing these policies borders on common sense. These proposals are not perfect, as enforcement may prove more difficult than income taxation, people will move assets to other countries, and increased funding for government tax agencies will be necessary. However, these proposals are effective steps to correct growing wealth inequality that accelerated during the COVID-19 pandemic.

A wealth tax is just one piece of the puzzle. Within rich countries, other necessary steps include robust inheritance taxes on the ultra-wealthy, taxing capital gains for these individuals more than income, and creating higher income tax brackets that discriminate between incomes beyond the levels of current tax codes. Moreover, because of the global nature of wealth inequality, governments of the world must pursue action on a global scale. The recent agreement from 136 countries, including all of the G20 nations, on a global minimum corporate tax of 15% represents a massive step forward in the fight against global inequality. By having a global minimum standard, corporations will find it harder to exploit tax havens, meaning governments around the world will be able to tax corporations more effectively, allowing wealth to be distributed more equitably. Additionally, to further decrease global inequality, rich countries can increase their aid to developing countries, perhaps by taxing the ultra-wealthy. 

Wealth inequality has been amplified by the COVID-19 pandemic. Without policy responses this issue will worsen in coming years, creating a more unequal and unjust world. There is reason for optimism, as some progress has been made, but there is still more work to do. Unless meaningful action is taken, the wealth and power will continue to become even more concentrated over the coming decades, potentially creating a sort of global oligarchy. This is not a future anyone wants, so policy action must be taken.