ourEconomy: Opinion

In Davos, my only message was to abolish billionaires

Somehow a long-time Kenyan equality activist got invited to the World Economic Forum. This was her message.

Njoki Njehu
31 January 2020
Njoki Njehu speaks at the World Economic Forum in Davos where she delivered her message: it's time to abolish billionaires
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Image: Fight Inequality Alliance

Somehow a long-time Kenyan activist with a track record of fighting inequality and injustice got invited to the World Economic Forum in Davos, Switzerland, last week.

That would be me. I arrived in Davos for an event I’ve been denouncing, for 25 of its 50 years, as a gathering of elites looking to put a smiley face on the inequality crisis and the climate emergency. Off-camera, they network and make deals. On camera, they talk about the need to reverse climate change or the long-running rise in global inequality, then finish their champagne and take their limo to their private jet back home. I was there to speak truth to power.

As the Pan Africa Coordinator for theFight Inequality Alliance, my message to the WEF is Abolish Billionaires. It’s rooted in the recognition that the billionaire class represents a catastrophic system failure. The massive concentration of resources in the hands of a few individuals is warping our societies and democracy itself, and is a betrayal of the principles of human welfare proclaimed by virtually all governments and all belief systems. The immiserating poverty and climate emergency engulfing our world are a reproach to the global capitalism that breeds billionaires. That betrayal must end now.

At last year’s WEF, a Dutch writer named Rutger Bregman went internet-viral when he told an audience gathered to hear about using philanthropy to fight inequality that the forbidden word there seemed to be “taxes.” His crowning line, “Taxes, taxes, taxes — the rest is bullshit,” continues to echo.

As well it should. Wealthy people get rich in a variety of ways, but they get richer still by, to use the best euphemisms, ‘structuring their affairs to minimize asset erosion’. That is, they don’t pay their taxes. Sure, they pay some tax, but the money they have gives them the option of hiring the specialized lawyers and accountants who have devoted their careers to finding ways around tax laws. And some of them devote big money to lobbying for tax cuts for the richest and low corporate tax rates, ensuring tax laws remain weak and making nonsensical messages like “low taxes sustain a healthy economy and society” into conventional wisdom.

To fight inequality, we need to bolster, not starve, our governments’ capacity to provide high quality public services. Only with good education for all, universal healthcare free of the threat of financial ruin, a guarantee of essentials like water and decent housing, and provision of childcare and other measures to lighten women’s burden of unpaid care work will we be able to begin reversing the huge disparities of power and wealth in our societies.

All of that takes money, and taxes are the only reliable and fair way of getting it. Entrusting public services to private companies, as institutions like the World Bank now promotes, almost always ends up costing more than direct public provision and runs a much higher risk of excluding the most vulnerable. A fair tax system will also work toward balancing the distortions between the poorest and the richest by ensuring progressivity: those who have more pay more (proportionally).

The tax reforms that would have the biggest impact on inequality include:

  • Putting an end to the use of “tax havens” — places (like Switzerland, no less!) that charge little or no tax and hide identities; they hold an estimated $32 trillion, over one-third of global GDP.
  • Ending the practice of corporate “profit-shifting,” where multinationals route their profits to places with lower taxes, using maneuvers like phony loans and inflating or deflating the prices of things exchanged among subsidiaries.
  • Eliminating harmful incentives that give companies “tax holidays” and create a “race to the bottom” as countries compete against each other for investment.
  • Curtailing another, more recent “race to the bottom” — in corporate tax rates, instead setting a global minimum corporate tax of 25%.
  • Making tax codes more progressive by reducing reliance on consumption taxes (like VAT and sales taxes) and increasing taxes on wealth — property, inheritance, capital gains, luxury items, and overall assets.

Some corporate initiatives make promises in this regard, and the OECD — the club of rich country governments — has made some efforts with developing countries, but it appears the status quo will prevail there too. People must demand that governments take bold action to rein in these abuses.

People are tired and angry from all of this hypocrisy, of billionaires and CEOs gathering in Davos to fight inequality in their name, when in reality, these same billionaires and CEOs directly cause their misery. At the same time as Davos, a Global Protest to #FightInequality took place in over 30 countries around the world. Their demands for dignity and justice include: universal education, health and nutrition, social security, redistributive tax policies, dignified jobs, radical action on climate change and more.

The world is rising against inequality and the billionaire class cannot lead this revolution — despite all of their futile talks in Davos. Solutions to this mess are not something we can find Davos, they are elsewhere — in the streets of Delhi and Guadalajara, where people are demanding justice and pounding the alarm for radical change.

Talk like this isn’t always welcome in Davos, I know. But I’m serious about fighting inequality, and I headed into the proverbial belly of the beast to do so. I may not get invited back, but they know what they have to do if they want to get serious about fighting inequality.

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