The rich are getting richer. According to a report by anti-poverty charity Oxfam, the world's richest 1% will control over 50% of global wealth next year. Oxfam suggests that inequality is holding back the fight against global poverty and undermining economic growth.
Yahoo Finance Editor-in-Chief Aaron Task says the study’s finding are astounding. “The global income inequality is bigger than I think it’s ever been and I’m not sure that’s good for the globe or just humanity period,” he says. The Oxfam report states the 80 richest people in the world hold the same wealth as the poorest 3.5 billion.
Winnie Byanyima, Executive Director of Oxfam International says the time is now for world leaders to act. “In the past 12 months we have seen world leaders from President Obama to Christine Lagarde talk more about tackling extreme inequality but we are still waiting for many of them to walk the walk.”
President Obama is expected to address the large gap between the rich and poor in tonight’s State of The Union address. In his weekly address to the nation over the weekend, Obama said he wants to “make sure that every American feels that they’re a part of our country’s comeback.”
The President is expected to include proposals for tax increases on the wealthy, free community college for all and tax breaks for the middle class. Task says “he is basically going to say we’re going to take wealth from the wealthiest individuals. We’re going to raise their capital gains and close loopholes on inherited trust funds and essentially we’re going to redistribute that money to middle-income Americans or lower income Americans.”
As for what Congress does with the proposals after the State of the Union, Task says, “I think its Dead on arrival. Its not going anywhere in Congress. It’s political. He’s trying to set the stage for 2016.” Task says the idea or the mere mention of redistribution is a red flag for some Americans and Congressional members. Some opponents say it’s the path to socialism or communism.
Task thinks sentiment could change as we head into the next general election. “If Americans are feeling like they are falling further and further behind and see the people at the very top accumulating all the wealth, they're going to vote for those kinds of proposals. They didn’t do that in the midterms. Maybe they will in 2016. I think that’s the president's agenda to set the stage for 2016.”
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