Economists warn $70T inheritance boom will widen global inequality: Report
What's the story
A report has warned that over the next decade, more than $70 trillion of inherited wealth will be passed down generations, widening inequality. The report was released before the G20 meetings in Johannesburg, due later this month, and highlights a growing gap between rich and poor countries. Nobel Prize-winning economist Joseph Stiglitz, who chaired an expert panel for the report, said 83% of all countries (representing 90% of the world's population) fall under high inequality as per World Bank standards.
Economic impact
Report warns of decline in democracy
The report also warns that countries with high inequality are seven times more likely to see a decline in democracy. South African President Cyril Ramaphosa, who also commissioned the report, called it a "blueprint for greater equality" and said it supports his G20 plan to put inequality on the global agenda. He added, "Inequality is a betrayal of people's dignity, an impediment to inclusive growth and a threat to democracy itself."
Policy recommendation
G20 should create panel to monitor global wealth trends
The report's main recommendation is for the G20 to create a permanent panel to monitor global wealth trends and their consequences and "evaluate alternative policies for addressing it, to inform governments, policymakers, and the international community." Stiglitz emphasized that this widening gap undermines democratic institutions and fuels populism. The report reveals that from 2000-2024, the world's top 1% captured 41% of all new wealth, while only 1% went to the bottom 50%.
Economic concern
Inheritance taxes crucial for addressing inequality
The report also cites Italian economist Salvatore Morelli's study, predicting that by 2035, $70 trillion of wealth will be inherited by future generations. It warns that without effective inheritance taxes, this trend will undermine social mobility and economic efficiency. According to the expert panel, the global wealth disparity between rich and poor will expand over the next decade in the absence of a permanent monitoring group like the UN Intergovernmental Panel on Climate Change.