The raising of income tax on the ones who are wealthy is going to help in closing down the gap between the poor and the rich as per the International Monetary Fund who feel it can be done without necessarily having to harm the growth.
The managing director of IFM has said that the higher levels of marginal tax rates for the ones who were better off are needed as the part of a rethink in policy for tackling the existing inequality.
This is a sign that the IMF is now moving away from their approach of tax cutting which had formed a major part of their advice in policy. They have said that there is a need for a different approach when it comes to tackling an issue that has become a major challenge when it comes to the economy globally.
The chief of IMF while writing a blog has said that the inequality across the generations and between men and women in addition to the income inequalities are all there in the society and have been there in a lot of the countries which are presently growing.
During the 1990s, the fund had been at the heart of the free market approach of running the economies which had included the beliefs that the better approach was to cut tax and experience the benefits to trickle down through better innovation as well as higher levels of growth.
The functions of IMF as the lender of last resort globally, bailing countries out in the times of financial difficulties and the issuance of advice on the policies along with the other interventions as and when required.