Lowering taxes on the wealthiest leads to greater inequality without significantly impacting economic growth or reducing unemployment, says new research from London School of Economics and the King’s College London.
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The researchers note that governments try to get their public finances back later the covid-19 crisisThey should not worry about the economic consequences of imposing higher taxes on the rich.
Based on data from 18 OECD countries, including the United Kingdom and the United States, over the past 50 years, the study estimates the causal effect of large tax cuts for the wealthy on income inequality and economic and employment growth. in different countries.
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“ We found that reforms that lower taxes for the wealthy lead to greater income inequality as measured by the top 1% of national income before this one (…). In contrast, such reforms have no significant effect on economic growth and the unemployment ratesaid the study by researchers David Hope and Julian Limberg.
A medical forecast presented to Congress indicated that between 70 and 150 million people could contract the coronavirus in the United States.
As the pandemic has put the governments of the world into a stuffy stage given the economic and social crisis, using public finances to support the people and businesses most affected by the Covid It is a real challenge for the United States, unlike other world powers such as China, Russia and the European system, which, through their model of social welfare, have more control over this treasury.
And while the president-elect Joe Biden promised in the election campaign to raise taxes among the top contractors and corporations, the US Congress is debating the details of A $ 900 Billion Covid-19 Aid Bill which is expected to include not only incentives, but also benefits to extend unemployment benefits, before this Friday’s deadline.
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Biden’s pledge is aimed at repealing the Tax Cuts and Jobs Act (TCJA) individual income tax cuts for those earning more than $ 400,000 and restoring the maximum tax rate on rent to 39.6 percent, up from 37 percent today.
Another proposal, according to the magazine, is aimed at increasing corporate income tax from 21 to 28 percent Newsweek.
Reforms that lower taxes on the richest lead to greater income inequality
According to the findings of the study on the effects of growth and unemployment, the theories are shown to suggest that Lower taxes for the wealthy translate into more opportunities for job offers for the population they are not entirely true and that, in fact, “the fall in taxes for the rich coincided with a period of growing inequality”.
Therefore, the researchers emphasize that their results are crucial in light of the current debates about the economic consequences of taxing the wealthy.
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The publication of the inquiry coincides with a call from some Democrats to fund a second stimulus check by repealing the president’s tax cuts. Donald Trump during mandate.
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