Giving Everyone a Fair Shot
The IMF wants to Give Everyone a Fair Shot.
The COVID-19 pandemic is intensifying the vicious circle of inequality. To break this pattern and give everyone a fair shot at prosperity, governments need to improve access to basic public services—such as health care (including vaccination) and education—and strengthen redistributive policies.
For most countries, this would require raising additional revenue and improving the efficiency of spending.
Holistic Approach
Enhancing access to basic public services will require additional resources, which can be mobilized, depending on country circumstances, by strengthening overall tax capacity. Many countries could rely more on property and inheritance taxes. Countries could also raise tax progressivity as some governments have room to increase top marginal personal income tax rates, whereas others could focus on eliminating loopholes in capital income taxation. Moreover, governments could consider levying temporary COVID-19 recovery contributions as supplements to personal income taxes for high-income households and modernizing corporate income taxation. In emerging market economies and low-income countries in particular, additional revenues could also be raised through consumption taxes to finance social spending. Further, low-income countries will need support from the international community to help with financing and implementing home-grown taxation and spending reforms.
In some countries, public support for better access to basic services, financed through higher taxes, has been strong and is likely increasing with the pandemic. A recent survey in the United States shows that those who had personally experienced the impact of COVID-19, either through illness or unemployment, have developed a stronger preference for more progressive taxation.
Robinhood Politics
These schemes always start out by promising to “tax the rich”. In practice, it never stops there.
To support socialist redistribution schemes, taxation inevitably dives further and further into the middle class.
You can see it coming with more “guaranteed income” proposals.
And the ideas get crazier and crazier like AOCs and Al Gore’s plan to spend $90 trillion to save the earth from oceans rising three inches over the next 50 years.
I assure you $90 trillion will not come from the wealthy or corporations.
The ultimate goal is to fund environmental nonsense and ensure that Jeff Bezos does not make more than the bottom 200 workers at Amazon.
Massive Tax Hikes
Yesterday, I commented Prepare for 3 Things: Big Government, Huge Boondoggles, Massive Taxes
Several readers wanted me do define massive taxes in the erroneous belief the proposals will only impact millionaires.
It won’t stop there because it never does. And look at the gigantic basket: Wealth taxes, corporate taxes, capital gains taxes, death taxes, consumption taxes, value added taxes (VAT), property taxes.
Spotlight Illinois
Illinois has 6,963 Taxing Bodies yet the state is broke with pension plans that are bankrupt.
Nothing is ever fixed in Illinois. But guess what the alleged fix is.
The governor wants higher taxes. Yet high taxes are the reason people escape Illinois.
On Oct 5, 2019, I wrote Escape Illinois: Get The Hell Out Now, We Are.
I am pleased to say that I am out of Illinois.
Exit Taxes
California progressives have their eyes on an exit tax, They want to go after anyone who lived in California and moved.
For discussion, please see California Seeks Wealth Tax to Soak the Rich, Even Those Leaving.
Don’t tell me these tax hikes will just be on the rich because they won’t.
It will never stop because politicians will dream up an endless parade of projects that can be funded by higher taxes.
To give everyone a “fair shot”, the IMF wants government to be Robinhood deciding who is rich, who is poor, and who needs to be made more equal. Inevitably the middle class suffers.
Mish
Yeah. Yeah. Yeah. We know that the best way for the rich to work harder and to make others rich too, is to cut their taxes. And the best way to make the poor and the middle class work harder and to make them rich, is to cut their wages. We’ve known that for 40 years.
Higher taxes on the rich? Bring it on! Wish we could make it retroactive – to 40 years. Even then, it would be difficult to recover the $50 TRILLION that the 1% stole from the bottom 90%.
As for the boogeyman that the tax hikes would affect the average person, I think the average person could wait to worry about that. As if there’s nothing to worry about now, huh?!
Apologies. Here is the correct link. The idea in question is to be found on the last page in Box 6.
Most people either missed or have forgotten this 2013 IMF paper.
Amongst a number of interesting ideas, the one expressed on page 49 is instructive… or, at the very least, should be instructive for attentive observers.
“The sharp deterioration of the public finances in many countries has revived interest in a “capital levy”— a one-off tax on private wealth—as an exceptional measure to restore debt sustainability. 1 The appeal is that such a tax, if it is implemented before avoidance
is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair).”
A capital levy is coming because the fiscal impasse in the West cannot be solved with band aids.
The only question is how the “levy” will be packaged and under what pretences. But a levy is coming.
Anyone who thinks we need more/higher taxes needs to honestly answer one question:
Who spends your money better and more efficiently. You or the Government?
If it’s you, then you should never be voting for any raise in taxes.
If it’s the government, then you should just turn over 100% of your pay to the government and live entirely on social assistance/benefits.
The question is whether the super rich and the corporations spend the money more efficiently. The answer is: No. The super rich buy politicians and the corporations buy back stock (and also the politicians).
Those higher taxes won’t be on me this time. I want the government spending rich people’s money, not mine.
If we get a VAT or some of the other proposed taxes they most definitely will be spending yours too.
VAT is fine if it funds a program like Medicare For All.
Let’s get to the heart of the matter. Should there be a wealth tax. Isn’t that what’s being debated?
Corporations don’t exist. In the physical world that is, like you and I exist, They are Imagineering beings created in the law. The assets they own do exist if they are tangible. Small corporations (Subchapter S), don’t pay taxes, their shareholders do. Eliminate C corps and make all of them S corps. The rich stockholders will pay more than the poor stockholders. Both will demand dividends to cover their tax bill.
Vampires can never get enough blood
Mine went up 3% under trump, and rich people’s went down. Time for theirs to go up. A lot. I’d say tax the poor too, but they don’t have any money.
I’m tired of being what’s for dinner.
The easiest way to pass a tax increase is to have it not affect most people, then expand the scope later on as more ‘revenue’ is needed (e.g. 1913 in the U.S.).
precisely – It’s “only” on the ______ (fill in the blanks) and it’s “Temporary” until it isn’t
Well you wanted Biden and his gang Mish. Now you have them. Good luck with that. I gave up my citizenship. Bye bye Miss American Pie.
The tax hikes pretty much never hit the rich. They also don’t increase tax revenue into the IRS. But I’m splitting hairs.
The idea that a 7% increase in “corporation taxes” will raise one dollar in revenue is a pipe dream. Congress – both parties, but especially Democrats – have been on corporate payrolls for decades. Increase the rate and increase the deductions. Net is zero or less.
The only tax change that actually increased revenue in recent years was President Trump’s change limiting state tax deductions. And that actually hit the rich. But it was President Trump and he did say “p*ssy” so there’s that.
The only things this tax bill will do are: 1) Pad the retirement accounts of accountants; 2) Pad the reelection coffers of CongressCritters; 3) Wipe out big sectors of small business and increase unemployment.
None of those are bad things to members of Congress.
The Frisby book is so good. If you read that, you will understand that taxes have no “enough”. There is always a need for more, and it never ends until there is a collapse or a revolution. The taxers are always there to suck a little more blood, hopefully without inciting terrorism. it just never ends.
For the good of everyone, of course. Because something….capitalists stole all the money from the people they gave jobs…..systemic racism…you name it.
Imagine how easy it was to start a business here before 1913. or how easy it was for a working stiff to make a living.
With Hong Kong going down, Singapore is about the last real tax haven…no wonder RE is so expensive there.
Yup. The most common ones I hear are for the child/grandchilden and then if you object it’s always because “your selfish” (without realizing that they are selfish for wanting more of your money – LOL).
Right’on man!