If there was a special award for chutzpah, the easy winner would be the bureaucrats at the International Monetary Fund. These pampered bureaucrats get lavishly compensated and don’t have to pay tax on their bloated salaries.
You would think this would make them a bit sensitive to the notion that it’s hugely hypocritical of them to propose big tax hikes when they have a special exemption.
But they have no shame. The international bureaucracy is making a renewed push for higher taxes all over the world.
You can read the actual IMF report, but the UK-based Guardian does a very good job of summarizing the important details.
The key takeaway is that the bureaucrats are telling governments to make the VAT more onerous (a standard IMF recommendation) and to raise other taxes as well.
…the current fiscal monitor…suggests there are ways of raising extra tax revenue, beyond the fund’s long-term support for broadening the tax base through the wider application of VAT.
And what are those other taxes? Well, the IMF is very promiscuous when urging the confiscation of other people’s money.
First, it supports the idea of a financial activities tax, which would be levied on the wages and profits of financial institutions. This would be the equivalent of levying VAT on financial services, which are currently exempt. …Second, the IMF thinks it is time to do something about an international tax system… Instead of a race to the bottom where countries compete with each other to offer the lowest rate of corporate tax, it urges co-operation.
Yes, you read correctly. The IMF wants a big tax hike on the financial services sector. I guess we’re supposed to believe that will strengthen banks or something like that.
And it wants to end tax competition so that greedy governments can more easily increase the tax burden on businesses.
Cartels are supposed to be a bad thing, but they suddenly become acceptable when governments get together and conspire on ways to rig the system in favor of higher taxes. That’s been an ongoing project for the OECD (another statist international organization filled with untaxed bureaucrats), and I guess the IMF wants to get in on the action.
But the most remarkable part of the IMF report is the endorsement of punitive class-warfare taxes.
Finally, the fund comes out in favour of having a long hard look at whether those on the highest incomes should pay more. In some countries, the US in particular, the IMF research suggests the rich are substantially under-taxed. …It compared the current tax rate paid by highest earners with the tax rate that would maximise revenue…the fund concluded the top rate of tax that maximised income was 60%, it was careful to set a range for each country studied.
For all intents and purposes, the IMF wants to turn back the clock and return to 1970s-style confiscatory tax levels. Top tax rates of 60 percent, no problem. Payroll tax rates of 30 percent, sounds great! Value-added tax burdens of 25 percent, peachy keen!!
The IMF’s message seems to be that the entire world should become France.
To be fair, however, at least the IMF acknowledges that the revenue-maximizing tax rate is less than 100 percent. Mon Dieu, they’re acknowledging the Laffer Curve! This means they’re not as far to the left as the bureaucrats at the Joint Committee on Taxation. I guess this is what people mean when they talk about damning with faint praise.
P.S. Just in case this isn’t enough evidence against the IMF, here are some more examples of the bureaucracy’s statist work.
- Endorsing government cartels to boost tax and regulatory burdens.
- Trying to undermine flat tax systems in Albania and Latvia.
- Encouraging a “collective response” to over-spending in welfare states.
- Pushing for higher tax burdens in Greece.
- Seeking the same destructive policy in Cyprus.
- Advocating for more centralization and bureaucratic rule in Europe.
- Urging higher taxes in El Salvador.
- Supporting “eurobonds” so that taxpayers from other nations can subsidize the profligacy of welfare states such as Greece, Italy, and Spain.
- Pushing an energy tax that would mean $5,500 of expense for the average American household.
So while I’m normally critical of Republicans for being timid, they deserve some praise for recently blocking even more subsidies for the IMF.