THE SOURCE FOR GLOBAL INEQUALITY DATA

[Pages:9]WID.WORLD

THE SOURCE FOR GLOBAL INEQUALITY DATA

Sustainable Development Goals: Who is at risk of being left behind?

Dr. Lucas Chancel

Co-Director, World Inequality Lab Lead coordinator, World Inequality Report

Lecturer, Sciences Po Paris

United Nations Headquarters | 9 July 2019

Income inequality rises almost everywhere, but at different speeds

Figure E2a Top 10% income shares across the world, 1980?2016: Rising inequality almost everywhere,

buTtoapt1d0if%feinrecnotmsepesheadrses across the world, 1980-2016

60%

50% 40%

India US-Canada Russia China Europe

30%

Share of national income (%)

20%

1980

1985

1990

1995

2000

2005

2010

2015

Source: WID.wSoorulrdce(2: W01o7rl)d. SIneeeqwuairli2ty0R1e8p.owrtid2.0w1o8r,lFdigfuorred2a.t1a.1s.eSreieeswairn2d01n8o.wteids..world for data sources and notes.

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trends in Global inCome inequality

Part II

The global bottom 50% grew... but the top 1% captured twice more total growth.

Figure 2.1.4 total income growth by percentile across all world regions, 1980?2016

250% 200%

Bottom 50% captured 12% of total growth

Top 1% captured 27% of total growth

150%

Prosperity of the global 1%

Real income growth per adult (%)

100% 50%

Rise of emerging countries

Squeezed bottom 90% in the US & Western Europe

0%

10

20

30

40

50

60

70

80

90 99 99.9 99.99 99.999

Income group (percentile)

Source: WID.woSrlodu(r2ce0:1W7)o. rSledeInweiqru2a0l1it8y .Rweipdo.wrto2rl0d1f8o,rFmiguorree 2d.e1t.a4i.lsS.ee wir2018.wid.world for data sources and notes.

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On the horizontal axis, the world population is divided into a hundred groups of equal population size and sorted in ascending order from left to right, according to

AAnnnunaul ialnicnocmoempeerpaedrulatd(u2l0t1(6))

Different inequality trajectories at the national level matter enormously for global poveFritgyureer5a.d1.i3cation

Global average income projections of the bottom 50%, 1980?2050

10 000 8 000

Average income assuming ...

6 000 4 000

Bottom 50% average income 3 100

9 100

... all countries follow EU 1980?2016 inequality trend

6 300

... all countries prolonge their own 1980?2016 inequality trend

4 500

... all countries follow US 1980-2016 inequality trend

2 000 1 600

0 1980

1990

2000

2010

2020

2030

2040

2050

Source: World Inequality Report 2018, Figures 5.1.3. See wir2018.wid.world for data sources and notes.

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Source: WID.world (2017). See wir2018.wid.world for data series and notes.

The worlAd iss bgelcoombainlgizaagtiainotntaxpfrroeegarreesas: ehosw, tthheenrceo'mspaenrsaatceelosers of globalization? to the bottom in corporate taxes

Corp. tax rate

50%

40%

Globalization and tax competition

World average corporate tax rate

MNE profits

20%

15%

30% 10%

20%

5%

10%

Multinational profits

(% of global corporate profits)

0%

0%

1981-89

1990-99

2000-09

2010-18

Notes: This figure charts the unweighted world average corporate tax rate and the share of global corporate profits made by multinational corporations. Multinational profits were around 1.4 trillion in 2015, while global corporate profits were around 7.9 trillion.

Zucman, 2017

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Part v

taCklinG eConomiC inequality

Top income tax rates are falling too

Figure 5.2.2 top income tax rates in rich countries, 1900?2017

100%

80%

Top marginal tax rate (%)

60%

40% US UK Germany

20% France Japan

0% 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Sources: Piketty (2014) and updates. See wir2018.wid.world for data series and notes.

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Between 1963 and 2017, the top marginal tax rate of income tax (applying to the highest incomes) in the US fell from 91% to 40%.

As tax rates on multinationals and top earners decline, govts. tempted to increase fiscal pressure on the poor and middle class

Corporate vs. consumption taxes in the EU

50

22

Rise of consumer

taxes

45

21

Top Corporate Tax rate Standard Consumption Tax Rate (VAT)

40

20

35

19

Fall of corporate

30

tax rate

18

25

17

1980 1985 1990 1995 2000 2005 2010 2015

Top Corporate Tax rate

Standard VAT rate

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Concluding remarks

? Extreme inequality is at the heart of unsustainable development patterns ? Tackling extreme inequality is key to end extreme poverty ? To do so, we need to end financial opacity and fix our global tax system

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