The International Monetary Fund considers it appropriate to increase taxes on the rich and companies that make the most.

The International Monetary Fund (IMF) considers it appropriate to increase taxes on the wealthy and the companies that earn the most in this inflationary crisis – mainly banks and energy companies – “as part of Spain’s 2023 general budget”. .

“As energy prices are expected to remain high next year, the additional temporary revenue increase to finance support for the most vulnerable is welcome, but monitoring the impact of the measures is necessary,” the institution’s technicians observe. Our country’s economic report was published on Wednesday.

“While banks’ net interest income is expected to grow in the near term alongside high interest rates, tighter financial conditions and a less favorable macroeconomic outlook could significantly impact costs due to increased impaired assets in stressed scenarios.” [en alusión al riesgo de incremento de la morosidad]”, – warned the International Monetary Fund.

The Washington, D.C.-based institution, therefore, considers the “significant” impact these taxes have on credit availability, borrowing costs and the resilience of banks. And he’s also thinking about energy companies. In addition, the IMF believes that these taxes should be temporary.

On the other hand, it indicates that the use of public support to mitigate the impact of rising energy prices is “timely”. Although he insists on “more attention” to the measures.

For example, the International Monetary Fund notes the expansion of social bonds towards energy, the increase of the minimum living income (IMV) and direct sector aid for companies. And it warns of other untargeted packages, such as general tax cuts or discounts for everyone, as with fuel.

“Discretionary” fiscal adjustment

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

In the face of uncertainty and “rising financing costs”, moderate deficit reduction is recommended. [el desequilibro entre ingresos y gastos públicos] to help ease pressure on prices and confirm commitment to fiscal discipline,” he notes.

The IMF also talks about pensions in its report. “Additional measures will be needed against future cost increases as a result of the 2021 pension reform. The reform permanently indexed pension payments to the CPI (Consumer Price Index) and removed the sustainability factor,” it said.

IMF Cookbook

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

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

Source: El Diario





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