The IMF Goes Rogue: Call For Taxing The Rich Infuriates 1%

The International Monetary Fund has often been the target of criticism and derision from the left (along with more than a few liberals and liberal-leaners) as a hegemonic tool of multinational corporations and Western democracies. How times have changed.

The IMF has set off shockwaves this week in Washington by suggesting countries fight budget deficits by raising taxes.

Tucked inside a report on public debt, the new tack was mostly eclipsed by worries about the US budget crisis, but did not escape the notice of experts and nongovernmental organizations (NGOs).

“We had to read it twice to be sure we had really understood it,” said Nicolas Mombrial, the head of Oxfam in Washington. “It’s rare that IMF proposals are so surprising.”

Guardian of financial orthodoxy, the International Monetary Fund, which is holding its annual meetings with the World Bank this week in the US capital, typically calls for nations in difficulty to slash public spending to reduce their deficits.

But in its Fiscal Monitor report, subtitled “Taxing Times”, the Fund advanced the idea of taxing the highest-income people and their assets to reinforce the legitimacy of spending cuts and fight against growing income inequalities.

And – wouldn’t you know it – Ryan Bourne, an apologist for the shamlessly Randian 1%ers, already has his Spanx in a bunch:

SOMETHING is going wrong at the IMF. Its traditional role as a stabilising force for countries in deep financial difficulty is being undermined by internal ideological disputes. This manifested itself most obviously in the debate over “austerity” measures, especially in the UK. Just as growth began to return, the IMF’s chief economist Olivier Blanchard told the chancellor he was “playing with fire” if he didn’t loosen fiscal policy. This intervention was significant not just because it has proven ill-founded, but because it highlighted a change of tone away from the IMF’s usual fiscal stance.

Many think this is a political shift, about opposing the economic agenda of US Republicans (which centres on spending cuts and entitlement reform). But on tax, the IMF has just published a bizarre new edition of its Fiscal Monitor, called Taxing Times, filled with discussion of left wing ideas.

By: dave-dr-gonzo

David Hirsch, a.k.a. Dave "Doctor" Gonzo*, is a renegade record producer, video producer, writer, reformed corporate shill, and still-registered lobbyist for non-one-percenter performing artists and musicians. He lives in a heavily fortified compound in one of Manhattan's less trendy neighborhoods.

* Hirsch is the third person to use the pseudonym, a not-so-veiled tribute to journalist and author Hunter S. Thompson, with the permission of his predecessors Gene Gaudette of American Politics Journal (currently webmaster and chief bottlewasher at Liberaland) and Stephen Meese at Smashmouth Politics.