By Andrea Shalal
WASHINGTON, Apr 1 (Reuters) – The International Monetary Fund said on Thursday advanced economies could use more progressive income taxes, inheritance and property taxes, and taxes on “surplus” corporate profits to help reduce inequalities. exposed by the COVID-19 pandemic.
The IMF’s Fiscal Monitor said the pandemic had exacerbated pre-existing inequalities in access to healthcare, education and digital infrastructure, which could cause income gaps to persist generation after generation.
Most countries would need additional revenue to ensure access to COVID-19 vaccines and improve services, while disrupting a “vicious cycle” of mutually reinforcing inequalities, he said.
To change course, countries must focus on better investment in early childhood education, health and development, and strengthen social safety nets, he said.
To raise the necessary resources, advanced economies could increase the escalation of income taxes and increase reliance on inheritance / gift taxes and property taxes, the IMF said.
“COVID-19 recovery contributions and ‘surplus’ corporate income taxes could be considered,” he said, adding that wealth taxes are another option if other measures are not sufficient.
Emerging market and developing economies should focus on strengthening fiscal capacity to finance more social spending, he said.
Oxfam welcomed the IMF’s support for taxing excess corporate profits and top income levels, and urged the IMF to move away from its own austerity requirements.
“The pandemic has deepened inequalities,” said Susana Ruiz, international tax policy leader for the nonprofit group, noting that billionaires’ wealth increased globally by “a staggering $ 3.9 trillion between March and December 2020 “.
He said the IMF and governments should avoid repeating what happened after the financial crisis of 2008-2009, when the burden of taxes shifted from wealthier and corporate profits to households.
“Unless the IMF follows its own advice on taxing the rich to reduce the gap between rich and poor, inequalities will continue to increase and we will not be able to rebuild better,” Ruiz said.
(By Andrea Shalal; Edited in Spanish by Juana Casas)