Raising income taxes on the rich would reduce inequality, says IMF

Written by Liam Kirkaldy on 12 October 2017 in News

The IMF rejected the argument that raising taxes on the richest one per cent would damage growth

Money - Image credit: Fotolia

Raising income taxes on the rich would reduce inequality without damaging the prospects for growth, according to the IMF’s half-yearly fiscal monitor.

Suggesting wealth taxes should be considered by government, the IMF rejected the argument that raising taxes on the richest one per cent would damage growth.

It said: “Empirical results do not support this argument, at least for levels of progressivity that are not excessive.”


Labour shadow chancellor John McDonnell said the report proved the need for a more progressive tax system.

He said: “The IMF support the argument we made in the General Election for a fairer tax system. There is no evidence to support those who scaremonger about the effects of making the rich pay fairer tax.”

He added: “With every day that passes the case for a change of direction at the Treasury grows.

"Instead of engaging in infighting in his own party the chancellor should listen to Labour’s calls for fairer taxes and increased investment, so we will build an economy for the many not the few.”

The Labour manifesto included plans for a 45 per cent tax rate for those earning £80,000 or more per year and £50 per cent for those on more than £123,000 a year.



Related Articles

HMRC's digital VAT pilot goes live
17 October 2018

Pilot to enable businesses to file their VAT online has gone live, aiming to make it easier for them to manage their records and save time

Chancellor Philip Hammond will need to find £19bn more a year to end austerity, IFS warns
16 October 2018

The think tank said that increasing income tax, national insurance and VAT to cover spending would put tax around the highest level since WWII

Digital infrastructure must be given same priority as traditional construction projects, says Michael Matheson
10 October 2018

The Scottish Government this week announced plans to establish an infrastructure commission to advise ministers on how spending can deliver maximum benefit for the economy

Related Sponsored Articles

Share this page