Wealth inequality drags growth: experts

As the world faces a crisis in wealth distribution, some experts doubt if the accumulation of capital will encourage innovation and investment, but instead, lead to multiple tax burdens and increase the gap between rich and poor. During a seminar in Ha Noi on Tuesday , representatives from the Viet Nam Institute for Economic and Policy Research (VEPR) and international charitable confederation Oxfam agreed that the four policies against tax inequality – public services, public spending on health and education, and labour policies – should be employed simultaneously. Deepak L. Xavier, head of Oxfam International’s Even It Up Campaign, said taxation was an important tool to lessen inequalities. However, recent studies from Oxfam and the World Bank (WB) all show that the tax systems in developing countries are often highly regressive and generate insufficient revenue. A lack of transparency and lack of co-ordination in their policies is said to be making the global tax system less effective in addressing poverty and inequality. Xavir said that tax burdens, such as the existence of tax havens, were driving global inequality up further by allowing multinational companies and super-rich individuals to shirk their tax obligations outside their home country. He argued that should these huge taxable amounts of income be retrieved in full, they could be used to fund public services, such as health care and free education – and any other social security programme. In agreement, Vu Sy Cuong, vice-dean of Financial Policy Analysis at the Academy of Finance, said he considered… [Read full story]


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