The Whole World Needs to Raise Taxes

It's not just America suffering from levels of economic inequality that threaten the very fabric of society. It's the whole world. So the rich need to pay the piper. That is the considered opinion of the International Monetary Fund, which is not a revolutionary organization.

One of the roles of the IMF is to keep an eye on the macro trends in the global economy, and to occasionally pipe up and say, in a buttoned-down manner, "Hey, you lunatics are driving your nations towards economic catastrophe." The fund has been on a bit of an encouraging little kick lately: a couple of weeks ago, it released a study that found that inequality is a drag on economic growth for nations, and that redistribution of wealth does not have negative effect on growth; and now, IMF officials are talking up the need for nations around the world to take concrete steps to address their own economic inequality, before the poors start (more, bloodier) revolution(s) (in more places than they already have very recently). From the Wall Street Journal:

The IMF's latest paper doesn't prescribe country-specific measures, but it does offer several proposals that are likely to be controversial. Most notably, the IMF says many advanced and developing economies can narrow inequality by more aggressively applying property taxes and "progressive" personal income taxes that rise as incomes increase.

The median top personal income-tax rate across the globe has halved since the 1980s to around 30%. But the IMF says "revenue-maximizing [personal income tax] rates are probably somewhere between 50% and 60% and optimal rates probably somewhat lower than that."

We have plenty of room to raise our top tax rates, along with our minimum wage. All in together now.

[Image: Shutterstock]