Taxing the rich is good for the economy, IMF says

[pampango]

A new paper by researchers at the International Monetary Fund appears to debunk a tenet of conservative economic ideology — that taxing the rich to give to the poor is bad for the economy. The paper by IMF researchers Jonathan Ostry, Andrew Berg and Charalambos Tsangarides will be applauded by politicians and economists who regard high levels of income inequality as not only a moral stain on society but also economically unsound.

Labelled as the first study to incorporate recently compiled figures comparing pre- and post-tax data from a large number of countries, the authors say there is convincing evidence that lower net inequality is good economics, boosting growth and leading to longer-lasting periods of expansion.

In the most controversial finding, the study concludes that redistributing wealth, largely through taxation, does not significantly impact growth unless the intervention is extreme. In fact, because redistributing wealth through taxation has the positive impact of reducing inequality, the overall affect on the economy is to boost growth, the researchers conclude.

The authors concede that their conclusions tend to contradict some well-accepted orthodoxy, which holds that taxation is a job killer.

http://www.cbc.ca/news/business/taxing-the-rich-is-good-for-the-economy-imf-says-1.2552141

Seems like a very significant study from a surprising source - which makes it all the sweeter. Can't for Krugman to comment on this.

The authors concede that their conclusions tend to contradict some well-accepted orthodoxy, which holds that taxation is a job killer.

This will be tough pill for the republican party to swallow. OTOH, they are used to rejecting science, facts and the results of studies that contradict the policies they pursue.

[steve2470]

1. kick and rec, excellent thread nt

[Scootaloo]

2. Too bad it's 35 years too late

The IMF has been shoving economic neoliberalism on the world on these decades, resulting in mass impoverishment of the bulk of the people in affected nations and the extreme growth of the wealth of a privileged few on their backs.

I guess now that the job is mostly done, the IMF feels free to go "Or maybe not"

I'm not for the death penalty as a rule. But even I have a line that can be crossed - every person involved in the economic genocide wrought by the IMF needs to have a rope-and-scaffold with their name on it

[Adrahil]

3. Yeah... great.... thanks for being late to the party.

I mean, duh... concentrating wealth is going to stifle a consumer-based economy and supply-side economics is a pile of horse-shit. Welcome to 30 years ago.

[hunter]

4. No shit IMF...

It's always been clear that without progressive taxation an economy becomes stagnant and corrupt.

"Reagonomics" was a filthy lie, and now we are suffering the consequences.

[pampango]

6. It does not let the IMF off the hook. Republicans cannot dismiss the study as "socialism"

coming from a "liberal think tank" or anything of that sort. It should be effective ammunition to push progressive taxation precisely because it is coming from such a proven conservative institution.

[Wounded Bear]

5. Welcome Miss Tardy to the Party...

It only took 30 or so years of proof to come to that conclusion.

If cutting taxes is a job creator, we'd have had full employment 20 years ago.