Globally, public sector resources have been starved for 40 years: Stiglitz

Joseph Stiglitz, co-chair of the Independent Commission for the Reform of International Corporate Taxation (ICRICT, for its acronym in English) and Nobel laureate in Economics, mentioned that the resources of the public sector, worldwide, have been in famine since 40 years ago.

“The resources available so that the public sector can make high-return investments and invest in education, infrastructure or technology have not had adequate resources. We are talking about the hunger that the public sectors have suffered, not only in the poor countries, but also in the rich ones”, commented the 2001 Nobel laureate in the forum “Winds of change: the future of fiscal reforms in Latin America” ​​in the framework of the meetings of the World Bank and the International Monetary Fund (IMF).

The ICRICT co-chair added that current tax structures are not progressive and, in some cases, are regressive. The richest percentages of the population are those who pay the lowest tax rates and therefore give rise to much resentment, undermine democratic systems and give rise to demagoguery.

The pandemic has triggered accelerating global inflation that has affected food prices, as well as energy prices. Given this, Stiglitz mentioned that this puts a lot of pressure on societies. He added that there is a huge wealth distribution crisis for many countries.

“For many countries, the best way to get new resources is through wealth taxation, ensuring multinationals pay their fair share, and taxing windfall profits. These measures do not affect investment if they are designed properly,” Stiglitz said.

In this sense, there are two countries in the region, Colombia and Chile, with leftist governments, which are preparing progressive fiscal reforms.

Colombia plans to implement windfall taxes, introduce the wealth tax and measures to combat tax evasion, said José Antonio Ocampo, Minister of Finance, during his speech at the panel held in Washington DC

For its part, Chile is also seeking the creation of a wealth tax. Claudia Sanhueza, undersecretary in the Ministry of Finance of that South American country, commented at the forum that to meet social demands in her country and at the same time have responsible fiscal management, a progressive reform is needed that increases fiscal resources permanently .