Tuesday, December 6

The IMF sees it as “appropriate” to raise taxes on the rich and the companies that earn the most


The International Monetary Fund (IMF) considers it “appropriate” to raise taxes on the rich and on the companies that earn the most in this inflation crisis -mainly banks and energy companies-, “as included in the General Budgets of Spain for 2023”.

Half of the rise in debt in 2020 and 2021 was due to the pandemic and saved 2.7 million jobs

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“As energy prices are expected to remain at high levels next year, raising additional temporary income to finance support for the most vulnerable is a welcome strategy, but monitoring the impact of the measures is necessary,” observe the technicians. of the institution in a report on the economy of our country published this Wednesday.

“While banks’ net interest income is expected to rise in the near term in parallel with higher rates, tighter financial conditions and a less favorable macroeconomic outlook could materially impact costs due to a increase in impaired assets in stress scenarios [en alusión al riesgo de incremento de la morosidad]”, has warned the IMF.

Thus, the Washington-based institution considers it “important” to monitor the incidence of these taxes on the availability of credit, the costs of loans and the resilience of banks. And he also thinks about energy companies. Furthermore, the IMF believes that these levies should be temporary.

On the other hand, it points out that the deployment of public support to cushion the impact of the rise in energy prices is “timely”. Although he insists on a “greater degree of targeting” of the measures.

For example, the IMF celebrates the expansion of social bonds with respect to energy, the increase in the Minimum Vital Income (IMV) and direct sectoral aid for companies. And it warns about other packages not aimed at the most vulnerable families and companies, such as general tax reductions or discounts for all, as in the case of fuel.

A “discretionary” fiscal adjustment

In the same report and along the same lines, he recommends “undertaking fiscal consolidation [ajuste] discretionary in 2023”, which “will help boost investor confidence and contain inflationary pressures”.

In the current context of uncertainty and “increasing financing costs, a moderate reduction in the deficit is recommended [el desequilibro entre ingresos y gastos públicos] to help alleviate pressure on prices and reaffirm the commitment to fiscal discipline”, he remarks.

The IMF also dwells on pensions in its report. “Additional measures will be needed to counter the increase in future spending resulting from the 2021 pension reform. The reform permanently indexed pension payments to the CPI (Consumer Price Index) and abolished the sustainability factor,” it says. .

The IMF cookbook

His latest recipe to fight inflation already included the use of “automatic stabilizers, such as unemployment, social protection systems focused on the most vulnerable families, progressive taxes and specific discounts on transport, energy, housing…”.

Meanwhile, it ruled out “extraordinary support for unemployment, job retention schemes such as the financing of ERTEs, general discounts, tax cuts, deferrals of taxes or general measures of direct financing to companies.”



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