Latin America and the Caribbean Economic Review, October 2024: Taxing Wealth for Equity and Growth

Informe Económico América Latina y el Caribe, Octubre 2024: Impuestos a la riqueza para la equidad y el crecimiento

William Maloney, Andres Zambrano, Guillermo Vuletin, Guillermo Beylis and Pablo Garriga

No 42001, World Bank Publications - Reports from The World Bank Group

Abstract: The report highlights the progress made on inflation and, despite some resistance in the last mile, the resulting fall in interest rates that will ease pressures on debt service and investment. However, growth is projected to remain low, debt remains high, private and public investment is depressed, and the region appears to be missing the boat on nearshoring FDI. The need to generate more fiscal space, reduce the high corporate tax burden, and mitigate persistent inequality have moved wealth taxes to center stage. But traditional wealth taxes on financial assets face challenges due to the ease of moving and hiding assets which will be difficult to control without elusive global coordination. A viable alternative is a tax on real estate which is less mobile, easier to track, and less of a distortionary burden on economic activity, given the low initial rates. Property taxes also have the potential to reduce the excessive dependence of subnational governments on federal transfers. For property taxes to play a greater role, there must be improvements in property valuation which can be engineered through the use of digital platforms and centralized land registries.

Keywords: Public; Sector; Development; Macroeconomics; and; Economic; Growth; Social; Protections; and; Labor (search for similar items in EconPapers)
Date: 2024
Note: ISBN 978-1-4648-2182-0
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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