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Reforming Tax and Welfare: Social Justice and Recovery after the Pandemic

Author

Listed:
  • FitzRoy, Felix

    () (University of St. Andrews)

  • Jin, Jim

    () (University of St. Andrews)

Abstract

Capital income subsidies, and reliance on indirect consumption taxes have created an increasingly regressive overall tax system in the UK, US and elsewhere, with proportionately much greater impact on the poor than on the rich, and welfare cuts under ten years of austerity have had the largest impact on the most vulnerable and poorest, now magnified by the Covid-19 pandemic. We show how a progressive wealth tax combined with a uniform, linear tax on all incomes and a modest basic income, with no exemptions or reliefs and no indirect taxes except excise taxes such as fuel duties, could be highly progressive overall, as well as much fairer and simpler than the present system. Such reform would render the economy much more resilient, and potentially devastating economic consequences of the pandemic could be mitigated by an emergency basic income and suspension of rental payments.

Suggested Citation

  • FitzRoy, Felix & Jin, Jim, 2020. "Reforming Tax and Welfare: Social Justice and Recovery after the Pandemic," IZA Policy Papers 157, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izapps:pp157
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    Cited by:

    1. FitzRoy, Felix & Nolan, Michael A., 2020. "Towards Economic Democracy and Social Justice: Profit Sharing, Co-Determination, and Employee Ownership," IZA Discussion Papers 13238, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    COVID-19; tax; welfare; policy; pandemic;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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