13 billionaires in Turkey have more combined wealth than 44 million people
The world's leading leaders and companies, that is the wealthy, are coming together again in Davos for a summit. As before every summit, Oxfam International has prepared a report that will throw striking data in the face of the club of the rich. The report is called “Survival of the Richest,” in reference to Darwin’s “Survival of the Fittest.” The report points to the saddest forms of inequality and injustice. So much so that the World Bank, which has failed in its fight against poverty, characterizes the current situation as the widest wealth gap since the Second World War. "Countries are on the verge of bankruptcy, and the poorest countries are paying more than four times the amount they currently allocate for health to wealthy credit institutions to be able to repay their debts,” the Bank commented.
What does the report say regarding the Turkey’s condition? How did it get to this point? We will seek to answer these questions.
63 OF EVERY 100 DOLLARS EARNED GOES TO 1% OF THE POPULATION
The Oxfam report begins with some striking data. Of every $100 of wealth earned in the world, $63 goes to the super-rich (1 percent of the population). The remaining $39 is shared among 7 billion 920 million people, if we take the world population as 8 billion. This data is so striking that it angers not only the reader but also the author of this analysis.
Let us continue analyzing the data. The year 2022 was synonymous with a food and energy crisis, especially for the poor. In the previous analysis, I had shared data showing that hydrocarbon-rich countries generated $2 trillion in revenue in 2022. This is also reflected in the Oxfam report. According to the report, 95 food and energy companies more than doubled their profits in 2022, with $257 billion (84 percent) of that profit paid out to wealthy shareholders. The Walton dynasty, which owns half of Walmart, made $8.5 billion last year. The wealth of Indian billionaire Gautam Adani, owner of major energy companies, increased by $42 billion (46%) in 2022 alone.
COMPANY PROFITS AS A CAUSE OF INFLATION
Last year, inflation left its mark on the world economy. While increasing inflation brings with it an increase in the number of poor, experts show that it is corporate profits that drive inflation. According to studies, increased corporate profits triggered 54 percent of inflation in the USA, 59 percent of inflation in the United Kingdom and 60 percent of inflation in Australia. CCOO, one of Spain’s largest unions, claimed that 83.4 percent of the price increase in the first quarter of 2022 was triggered by company profits.
While inflation persists in Turkey, the profits of banks and large holding companies reaching 400% and the transfer from FX Rate Protected Deposits are examples of this situation. On the other hand, while at least 1.7 billion workers live in countries where inflation is diluting their wages, billionaires increase their wealth by 2.7 billion dollars every day.
Gabriela Bucher, Executive Director of Oxfam International, said: “While ordinary people must make sacrifices from basic needs such as food every day, even the wildest dreams of the super-rich come true. Although we are only past the first two years, it looks like this decade (the 2020s) will be the best billionaires have ever had.”
TAXES AND MUSK’S WEALTH
Elon Musk is one of the most brutal examples of wealth distribution. Due to a sudden occlusion of his otherwise magnificent genius(!), he lost more in wealth than the GDP of some countries this year. Musk's wealth, which was $340 billion last year, has dropped to $170 billion at the end of 2022 (it apparently evaporated just like the $128 billion of the Turkish Central Bank, which suddenly evaporated). But how much in taxes does Musk pay with this amount of wealth?
Since he has no civil servants and payroll employees in Turkey, Musk's salary is not deducted as soon as it enters the tax bracket. In fact, it almost never happens. According to ProPublic data, the tax rate Musk paid between 2014 and 2018 is 3.27 percent. Musk is not alone in this regard, in fact, in accordance with this favoritism, the billionaire class earned a total wealth of $2.6 trillion in 2021 and 2022 compared to the pre-pandemic years. According to Oxfam, 2 billion people can be lifted out of poverty when a mere 5 percent tax is taken from multi-millionaires (the poverty line calculation is based on 6.85 dollars or 130 liras per day).
THE WEALTH OF THE TOP 1 PERCENT IN TURKEY IS 1.4 TIMES THE TOTAL WEALTH OF THE BOTTOM
In addition to the Oxfam Report, the Foundation for the Support of Women's Work (KEDV) focused on the issue of Turkey and obtained striking data here as well. According to KEDV, the wealth of the 13 richest billionaires in Turkey is more than the total wealth of half of the population (38.5 billion dollars versus 38.9 billion dollars). In other words, the total wealth of 13 people is more than the wealth of 44 million others. The wealth of the richest 1 percent in Turkey is 1.4 times the wealth of the bottom 90 percent.
These findings are in line with the Organization for Economic Cooperation and Development (OECD) and Development Finance International (DFI) reports. The 2022 Commitment to Reducing Inequality Index (CRI Index), prepared by Oxfam and DFI, was released in September 2022. In this report, Turkey is one of the 3 countries with the most unequal distribution of wealth. Turkey is the OECD country with the most unequal wealth distribution. The country with the highest increase in housing prices is again Turkey.
Similarly, social welfare policies especially during the pandemic period, gives an idea about the practices in Turkey. In the 2022 CRI Index’s ranking of social protection spending, Turkey was again in last place among OECD countries.
The stinginess in social protection spending points to a separate injustice in taxes. Although everyone pays taxes, such as value added taxes and special consumption taxes, the same is not the case for wealthy individuals and companies. According to the report, although corporate and income tax rates have increased in the last two years, the collection rates of these taxes remained at 17 percent and 16 percent, respectively. For this reason, Turkey was ranked 114th among 161 countries in the “category regarding steps towards tax justice.” Since most of the employees in Turkey enter the tax bracket in certain periods of the year, there are serious cuts in their salaries. On the other hand, there is no similar enthusiasm towards collecting the wealth tax and taxing companies.
To summarize, the income gap and injustice in the world are more brutal than ever before. The common consensus has been to solve this with wealth tax increases. But that would only be a band aid solution. The summit at Davos has never been the solution to poverty. Although this club, which does not include the poor, unions, or workers and whose membership starts at 50 thousand dollars, is the place where solutions to poverty are discussed, any such solution will not be to the advantage of the poor. Perhaps the solution is in an approach that focuses on the system itself and opens the door to new alternatives.