There is a growing number of business elites who raise questions about disparity in wealth distribution in the world and Richard Branson, founder of the Virgin Group stands out among them.
Branson, the billionaire entrepreneur known for his philanthropy as much as for his business successes, took the opportunity to talk about the issue while delivering a speech at the Milken Institute Summit in Abu Dhabi this week.
“We have to try and do everything we can to lift the vast majority of people up, when for the last few years the vast majority have not seen their living standards improve,” Branson told the audience. “I don’t think we should throw out capitalism. But for those of us who are fortunate to have made wealth, we have a responsibility to throw that out there and tackle some of the great problems. If we don’t do that, then we deserve to have very heavy taxes levelled on us.”
There is a growing debate about the current state of wealth inequality across the world currently. There are growing demands for imposing more taxes on the rich and the super rich. According to economists, a growing sense of millions of people in the developed world and economies about they being left out of the economic growth in recent decades is partly responsible for the increase in the spread of populist rhetoric and a increasing popularity of anti-establishment politicians.
“Capitalism basically is not working for the majority of people. That’s just the reality,” hedge fund mogul Ray Dalio, with a net worth of $18 billion, told a panel at Davos in January.
But during the Summit at Abu Dhabi, he pointed out that “the top one-tenth of 1 percent of the population’s net worth is equal to the bottom 90 percent combined. In other words, a big giant wealth gap.” If he were president, he said, “I think that you have to call that a national emergency.”
According to a recent survey conducted by the US Federal Reserve, about 40 per cent of Americans would not be able to bring out $400 if there is an emergency. And another report by Oxfam in 2019 showed that the wealth owned by the poorest half of the world is the same as just 26 super rich people in the world.
According to comments made by a large section of the high-net worth business leaders, today’s problems would be better solved by the private sector instead of government bureaucracies which are either inefficient or overburdened or both. Speaking at the World Government Summit in Dubai, entrepreneur Arianna Huffington stressed on the urgent need for millions to get access to better health care and said that “corporations can provide the solution.”
However, calls for higher taxes for the rich have been given by some of the super rich such as investing guru Warren Buffett. He wrote that it’s time to “stop coddling the rich” and the time for more equitable distribution of wealth. “My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice,” he wrote in a New York Times op-ed in 2011. “People invest to make money, and potential taxes have never scared them off,” he said.
More “progressive taxes” on wealth has been professed by Microsoft founder Bill Gates but has opposed Ocasio-Cortez’s aim to target high incomes.
“Now, you finally have some politicians who are so extreme that I’d say, ‘No, that’s even beyond,'” Gates told The Verge in an interview this week. He was referring to a comment by Ocasio-Cortez. “You do start to create tax dodging and disincentives, and an incentive to have the income show up in other countries and things.”
(Adapted from CNBC.com)