Significance
The region’s current tax and spending policies redistribute very little. The COVID-19 pandemic brought a deep and persistent recession, despite new spending, tax cuts and monetary easing aimed at limiting the damage. In December, the government of Argentina, which was particularly hard hit, passed a temporary (and additional) net wealth tax on the very richest households.
Impacts
OECD-led transparency efforts offer the long-sought possibility of taxing the foreign assets of wealthy Latin Americans.
The pandemic will increase both existing inequalities and the need for tax revenues to finance social welfare and stimulus spending.
Efforts to strengthen tax collection more broadly will likely be undertaken by governments across the political spectrum.
Globalization and the societal consensus of wealth tax cuts