IMF to Nations: Tax Finance Firms |
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April 21, 2010
The International Monetary Fund advised Group-of-20 nations to tax balance sheets, profits and compensation of financial institutions to reduce the chances of another financial crisis, and pay for the costs if one occurs.
The International Monetary Fund advised Group-of-20 nations to tax balance sheets, profits and compensation of financial institutions to reduce the chances of another financial crisis, and pay for the costs if one occurs.
"Expecting taxpayers to support the [financial] sector during bad times while allowing owners, managers and/or creditors of financial institutions to enjoy the gains of good times misallocates resources and undermines long-term growth," the IMF wrote in a briefing paper for the G-20 industrialized and developing countries.
Specifically, to pay for the costs of winding down troubled financial institutions, the IMF proposed what it called a Financial Stability Contribution"—a tax on balance sheets, including "possibly" off-balance sheet items, but excluding capital and insured liabilities.
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