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April 23, 2021

Why wealth tax won’t pay off UK pandemic debt

By Paul Dennis

23 April

Daniel Lacalle, chief economist and investment officer at Tressis Gestión, shared an article on Nobel economist Angus Deaton’s warning against wealth tax to pay off pandemic debts.

According to Deaton, temporary measures risk becoming permanent if introduced.

A Princeton University professor, Deaton is officially studying inequality with a panel of experts in the UK.

The team is analysing ways to reduce inequalities, particularly focusing on the young and how the lack of education impedes their success.

Deaton states that levies on high-earners or the rich would be difficult to implement, while if the wealthy are given huge incentives to avoid it, they will.

The remarks came immediately after some politicians called for the wealthy to bear the burden of the record government borrowing to revive economies hit by Covid-19.

The International Monetary Fund (IMF) recently stated that a temporary levy would certainly help in easing social inequalities that have developed during the coronavirus pandemic.

Deaton believes that the pandemic has emphasised the trends that have already been unfolding in the US and UK.

For instance, education has become an important variable in determining life outcomes. Likewise, unemployment is becoming a less useful indicator of economic health.

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