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The Socialist 5 July 2007 |
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"A new gilded age of inequality"
LAST YEAR the world's richest people increased their wealth at the fastest rate in seven years. Business consultants to the world's rich - Merrill Lynch and Cap Gemini - revealed that the total wealth of the super-rich rose 11.4% to $37.2 trillion (£18.6 trillion) in 2006. This staggering sum may exceed $40 trillion by 2008.
The UK is now home to 17% of Europe's wealthiest individuals. Recently, the Sunday Times 'Rich List' revealed that Britain's biggest fortunes grew 20% over the last year. The wealth of the top 1,000 super-rich - including 68 billionaires - in Britain now stands at £360 billion. Gordon Brown's tax breaks mean that 85% of these individuals pay no taxes on their super-stash.
Princeton University economist Paul Krugman estimates that the incomes of the US working class and middle class have hardly risen in the last 25 years whereas incomes of the rich have gone up by 150%. A similar widening of the wealth gap can be seen in the UK.
Krugman comments: "If you look at the distribution of income, at least pre-tax, it is the same as it was in the 1920s, and the 1920s looked the same as pre-World War One - so we are in a new gilded age of inequality."