IPFS News Link • Economy - International
IPFS News Link • Economy - International
It was a week ago that we highlighted the latest implied IMF proposal
on how to reduce income inequality, quietly highlighted in its paper
titled "Fiscal Policy and Income Inequality". The key fragment in the paper said the following:
Some taxes levied on wealth, especially on immovable
property, are also an option for economies seeking more progressive
taxation. Wealth taxes, of various kinds, target the same
underlying base as capital income taxes, namely assets. They could thus
be considered as a potential source of progressive taxation, especially
where taxes on capital incomes (including on real estate) are low or
largely evaded. There are different types of wealth taxes, such as
recurrent taxes on property or net wealth, transaction taxes, and
inheritance and gift taxes. Over the past decades, revenue from these
taxes has not kept up with the surge in wealth as a share of GDP (see
earlier section) and, as a result, the effective tax rate has dropped
from an average of around 0.9 percent in 1970 to approximately 0.5
percent today. The prospect of raising additional revenue from the
various types of wealth taxation was recently discussed in IMF (2013b)
and their role in reducing inequality can be summarized as follows.