sir richard toham hatt Imagine for a moment that you live on the island of Sodor in the employ of the North Western Railway. There are exactly 100 families living on the island and the whole of the island's economy consists of £1,000. The wealth is distributed in this way: the family of Sir Richard Topham Hatt, the great grandson of the first Fat Controller for the railway, guides a family fortune of £480. Your family, and the other 98 families living on the island share equally in the remaining £520, a sum of £5 25p. The economy of Sodor, then, would be a microcosm of the real world we live in, according to the anti-poverty charity Oxfam. Instead of the Hatt family, let us consider the Waltons and their patriarch Sam.
Billionaires and politicians gathering in Switzerland this week will come under pressure to tackle rising inequality after a study found that---on current trends---by next year, 1% of the world’s population will own more wealth than the other 99%. Ahead of this week’s annual meeting of the World Economic Forum in the ski resort of Davos, the anti-poverty charity Oxfam said it would use its high-profile role at the gathering to demand urgent action to narrow the gap between rich and poor. The charity’s research, published on Monday, shows that the share of the world’s wealth owned by the best-off 1% has increased from 44% in 2009 to 48% in 2014, while the least well-off 80% currently own just 5.5%. Oxfam added that on current trends the richest 1% would own more than 50% of the world’s wealth by 2016. Winnie Byanyima, executive director of Oxfam International and one of the six co-chairs at this year’s WEF, said the increased concentration of wealth seen since the deep recession of 2008-09 was dangerous and needed to be reversed.
So, how do we reverse that concentration of wealth?
Inequality has moved up the political agenda over the past half-decade amid concerns that the economic recovery since the global downturn of 2008-09 has been accompanied by a squeeze on living standards and an increase in the value of assets owned by the rich, such as property and shares. Pope Francis and the IMF managing director Christine Lagarde have been among those warning that rising inequality will damage the world economy if left unchecked, while the theme of Thomas Piketty’s best-selling book Capital was the drift back towards late 19th century levels of wealth concentration. Barack Obama’s penultimate State of the Union address on Tuesday is also expected to be dominated by the issue of income inequality. He will propose a redistributive tax plan to extract more than $300bn (£200bn) in extra taxes from the 1% of rich earners in order to fund benefits specifically targeted at working families. However, the odds of the White House having any success persuading Congress to adopt the plan, given the Republicans’ new grip on both chambers, are extremely long. But Obama’s embrace of what he calls “middle-class economics”---as opposed to the trickle-down economics of the Republicans---is likely to ensure that inequality remains a pivotal theme of the 2016 presidential campaign.
Jeff Hess: Have Coffee Will Write.


  1. Tom says:

    Exempt the working class from federal income tax.

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