IMF proposes a “temporary” tax on the rich to recover from the pandemic

Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva (Photo: Samuel Corum via Getty Images)

The International Monetary Fund (IMF) has proposed this Wednesday that countries impose a “temporary” tax on the highest incomes and the rich aimed at financing the needs related to the pandemic and the crisis that it entails, which has caused the general increase of deficit and debt levels.

“To help address the financing needs related to the pandemic, the authorities could consider a temporary contribution to the post-covid recovery applied to high incomes and wealth,” said Vitor Gaspar, director of the IMF’s Fiscal Affairs Department at Press conference. This fund would channel the resources needed to improve access to basic services and ensure social safety nets, among others.

Gaspar has recognized that “pre-existing inequalities have amplified the adverse impact of the pandemic and, at the same time, covid-19 has aggravated inequalities”, which implies “a vicious circle of inequality that could lead to a social breakdown and politician”.

The new IMF Fiscal Surveillance report highlights that the enormous fiscal support deployed by the authorities has prevented more severe recessions and further job losses.

However, it warns that public deficits and debt have skyrocketed to unprecedented levels.

In general, the average deficit with respect to GDP in 2020 reached 11.7% in 2020 in advanced economies, 9.8% for emerging countries and 5.5% for low-income countries.

The IMF has presented the report in the framework of the spring assembly held virtually jointly with the World Bank, and where it raised forecasts for global economic growth to 6%, compared to the 5.5% anticipated three months ago. .

This article originally appeared on The HuffPost and has been updated.