In ‘The Economic Consequences of Major Tax Cuts for the Rich’, Dr David Hope and Dr Julian Limberg revealed that cutting tax for the wealthiest in a host of Western economies had no ‘significant effect’ on economic growth and unemployment but did serve to concentrate a greater share of national income among those at the very top.
In a piece for The Conversation, the researchers argue that, in order to address the financial fallout from the COVID-19 pandemic, governments should consider placing a greater tax burden on the rich, which might serve to lessen the burden on the public purse and reduce societal inequalities.
They said: “Many analysts and policymakers believe that taxes will need to rise in the coming years to ensure the sustainability of public finances. Higher taxes on the rich could help to fund the substantial and potentially long-lasting expansion of government spending and social protection seen during the pandemic.
“They could also help address health and economic inequalities, which have only been exacerbated by COVID-19 and its economic fallout.”
Dr Hope and Dr Limberg are members of the Department of Political Economy at King’s College London. Their findings have also been reported by Bloomberg and CBS.
The piece was also acknowledged in a tweet by the American Democratic Senator Elizabeth Warren.