{"id":482489,"date":"2021-04-16T10:48:24","date_gmt":"2021-04-16T08:48:24","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=482489"},"modified":"2021-04-16T11:09:40","modified_gmt":"2021-04-16T09:09:40","slug":"the-imf-says-a-wealth-tax-could-help-with-covid-19-recovery-but-a-nobel-economist-disagrees","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/wealth\/482489\/the-imf-says-a-wealth-tax-could-help-with-covid-19-recovery-but-a-nobel-economist-disagrees\/","title":{"rendered":"The IMF says a wealth tax could help with Covid-19 recovery – but a Nobel economist disagrees"},"content":{"rendered":"

The International Monetary Fund (IMF) says that taxes on high-income earners and corporations can help advanced economies raise revenues to recover from the global pandemic.<\/p>\n

Rebuilding from Covid-19 offers an opportunity to reverse the erosion in personal income taxes paid by the highest earners, Vitor Gaspar, the director of the IMF fiscal affairs department, told reporters this week.<\/p>\n

\u201cOne specific option that is available to policymakers would be a Covid-19 recovery contribution that could take the form of a surcharge on personal income tax or a surcharge on corporate-income taxes given that some corporates have done very well in terms of stock-market valuation,\u201d Gaspar said.<\/p>\n

\u201cThere is an opportunity there, and that\u2019s one of the options that is on the table.\u201d<\/p>\n

The IMF has also been calling for a minimum global corporate income-tax rate as a way \u201cto interrupt the race to the bottom in corporate-income taxation,\u201d Gaspar said.<\/p>\n

“It\u2019s important to ensure that governments have the resources needed for their spending priorities, and a minimum rate is something that we believe can be extremely important for the financing of the developing countries,” he said.<\/p>\n

However, a wealth tax is a bad way to pay off pandemic debts and probably would become permanent if introduced, Nobel Prize-winning economist Angus Deaton told Bloomberg<\/a><\/strong>.<\/p>\n

Levies on high-earners would be \u201cvery difficult to implement\u201d and give the wealthy \u201chuge incentives to avoid it – and avoid it they will,\u201d said Deaton, a Princeton University professor who is working on an official study of inequality in the UK.<\/p>\n

The remarks brush against a growing number of politicians calling for the richest to shoulder more of the burden of the record borrowing taken on by governments to prop up economies hit by Covid-19.<\/p>\n

The International Monetary Fund this week said a\u00a0temporary levy\u00a0would help to alleviate social inequalities that have deepened in the pandemic<\/p>\n

The author of the book \u201cDeaths of Despair,\u201d which he co-wrote with his wife and fellow economist Anne Case, said in an interview that a one-time wealth tax is \u201clikely to turn permanent,\u201d just as the income tax did.<\/p>\n

Britain introduced taxes on pay to fund the Napoleonic War, and now it\u2019s one of the most prominent sources of revenue.<\/p>\n

After a decade of austerity in Britain following the financial crisis, Deaton also recommended against cuts to social services, warning that \u201cthe doomsayers, the deficit hawks, the austerity mavens\u201d created a disaster by slashing funds for health and education.<\/p>\n

He\u2019s leading a panel of experts in the UK probing how to reduce inequalities, where the young and those with less education increasingly fall behind the wealthy. The Institute for Fiscal Studies plans to publish its findings in 2023.<\/p>\n

Deaton said the pandemic accentuated trends already unfolding in both the US and UK For one, education is becoming a more important variable in determining life outcome of people.<\/p>\n

Also, unemployment is becoming less useful as an indicator of economic heath. While a recovery from recessions caused by the pandemic will create jobs, Deaton said many more are being left behind.<\/p>\n

\u201cIn economic booms, it always picks up, but it never picks up as far as the previous peak,\u201d Deaton said. \u201cYou get this endless downward ratchet. That\u2019s something we really need to turn around, and it\u2019s going to be hard.\u201d<\/p>\n

\n

Read: These are the most expensive places in the world for the wealthy \u2013 and how South Africa compares<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The International Monetary Fund says that taxes on high-income earners and corporations can help advanced economies raise revenues to recover from the global pandemic.<\/p>\n","protected":false},"author":10,"featured_media":346954,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9880],"tags":[26],"class_list":["post-482489","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-wealth","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/482489","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=482489"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/482489\/revisions"}],"predecessor-version":[{"id":483757,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/482489\/revisions\/483757"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/346954"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=482489"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=482489"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=482489"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}