The IMF Channels Bernie Sanders on Taxes
October 12, 2017, 5:00 AM EDT
Excerpt:
The International Monetary Fund spent decades telling the world’s governments how to run their economies on an American-inspired blueprint that became known as the Washington Consensus.
There wasn’t much consensus between the Fund and the White House on Wednesday, as they got embroiled in an unusually public disagreement over President Donald Trump’s tax plans.
The flashpoint was a new IMF paper arguing that developed nations can share prosperity more evenly, without sacrificing growth, by shifting the income-tax burden onto the rich. “Excessive inequality can erode social cohesion, lead to political polarization, and ultimately lower economic growth,” it said. The study came out as Trump was hitting the road to promote the biggest overhaul of America’s tax code in decades. The Tax Policy Center, echoing most independent analysts, says it will benefit high-earners most.
As it hosts the world’s financial leaders in Washington this week, the IMF has been celebrating a global recovery that’s gathering pace after the crash of 2008. But old economic certainties -- the kind that once prevailed at such gatherings -- are proving harder to put back together, and new concerns are forcing their way onto the agenda. The Fund has been rowing back from many of the policy prescriptions it used to hand out. Meanwhile, in developed economies, voters have expressed frustration with what they perceive to be the unequally shared fruits of free trade and open borders -- most dramatically in the U.S., by electing Trump.
https://www.bloomberg.com/news/articles/2017-10-11/-tax-the-rich-is-imf-s-unlikely-new-mantra-in-fight-with-trump