The October publication of the IMF’s fiscal monitor report has caused much debate by suggesting that countries reduce budget deficits by increasing taxes on the rich. Known for suggesting public expenditure cuts, the Fund advanced its ideas for reducing public deficits by highlighting the need to “raise more revenue from the top of the income distribution,” suggesting that both high-income earners and multi-national corporations should pay higher taxes. Following the uproar this proposal created, especially in the US, the IMF in early November denied favouring a tax on the rich arguing the report “does not recommend a wealth tax.” International NGO Oxfam suggested that to reduce budget deficits the Fund needs to address illegal capital flows which cost developing countries billions of dollars.
World Bank & IMF in the news
EarthRights International examines how the Jam v. IFC case has helped to shift the landscape of accountability for international financial institutions by successfully challenging their claim to “absolute” immunity in US courts, potentially opening IFC up to further legal challenges in future.