IMF calls for tax hikes on wealthy to reduce income gap

Global lender of last resort warns inequality exacerbated by Covid crisis could trigger social unrest

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The International Monetary Fund has called on governments to close the income gap between the richest and poorest that has worsened during the Covid pandemic, by spending more and taxing wealthy households.

In a warning that the economic shock triggered by the pandemic could undermine public attitudes to the fairness of taxation and welfare systems and lead to social unrest, the Washington-based organisation said surveys showed governments would have the support of the public if they shifted the burden of taxation away from low and middle earners to better-off members of society.