IMF: taxes on rich and high incomes to help recovery

• The IMF raises Italy's GDP in 2021 to 4.2%, + 3.6% in 2022. US locomotive drives world recovery

• IMF: "Italy needs a credible plan to reduce debt when recovery is consolidated"

• IMF: the recovery slows down, the crisis will leave deep scars

Share

April 07, 2021 Governments should consider higher taxes on the rich to pay Covid bills.

This was stated by the IMF, according to which countries should consider "a temporary contribution to recovery from Covid" to be paid by the highest incomes.

This would help reduce inequalities and "increase the likelihood of intergenerational mobility" given that young people are the ones who are paying the highest price of Covid.

"Until the pandemic is under control, fiscal policy must continue to support and remain flexible," says the International Monetary Fund in the Fiscal Monitor, stressing that when the economic recovery is instead firmly anchored the objective of the policy of budget will be to promote a "green and fairer" economy.

"If the pandemic is under control with vaccinations," there will be "stronger economic growth that will yield more than $ 1 trillion in additional tax revenues in advanced economies by 2025," notes Vitor Gaspar, head of the Fiscal Monitor.

World public debt has risen to record levels but was the result of exceptional stimulus measures put in place by governments to avoid the worst.

Gaspar says this, considering vaccines the "best possible investment".

"World public debt rose to almost 97% of GDP at the end of 2020 and is expected to remain just below 100% over the medium term. Unemployment and extreme poverty have increased significantly. The pandemic therefore risks leaving deep scars." , he warns.