Even IMF Knocks "Trickle-Down" Economics, Says Poor People Should Be Paid More Money

Inequality isn't just bad for the people on the bottom, it's bad for the entire economy. That's the conclusion of a new study from the IMF which dismisses the concept of "trickle down" economics and suggests that the poorest 20% of citizens should make more money. “Raising the income share of the poor, and ensuring that there is no hollowing-out of the middle class, is actually good for growth," the report reads.

The study also called for more investment in health and further progressive taxation. "Fiscal policy already plays a significant role in addressing income inequality in many advanced economies," it explains, "but the redistributive role of fiscal policy could be reinforced by greater reliance on wealth and property taxes, more progressive income taxation, removing opportunities for tax avoidance and evasion, better targeting of social benefits while also minimizing efficiency costs, in terms of incentives to work and save.”

The IMF's conclusions contradict some of its actual policies. In Greece, the organization prescribed a diet of austerity and strategies that would further erode the rights of workers. This clearly strays from the thrust of this report. "An increase in the income share of the bottom 20% is associated with higher GDP growth," it bluntly declares.


Understand the importance of honest news ?

So do we.

The past year has been the most arduous of our lives. The Covid-19 pandemic continues to be catastrophic not only to our health - mental and physical - but also to the stability of millions of people. For all of us independent news organizations, it’s no exception.

We’ve covered everything thrown at us this past year and will continue to do so with your support. We’ve always understood the importance of calling out corruption, regardless of political affiliation.

We need your support in this difficult time. Every reader contribution, no matter the amount, makes a difference in allowing our newsroom to bring you the stories that matter, at a time when being informed is more important than ever. Invest with us.

Make a one-time contribution to Alternet All Access, or click here to become a subscriber. Thank you.

Click to donate by check.

DonateDonate by credit card
Donate by Paypal
{{ post.roar_specific_data.api_data.analytics }}