IMF says not recommending a wealth tax

WASHINGTON (AFP) - The International Monetary Fund denied on Thursday that it favoured a tax on the wealthy to reduce public deficits, as suggested by a recent IMF report.

"We're not recommending a wealth tax, it's an analytical work," IMF spokesman Bill Murray said at a news conference.

In the report released in early October, the IMF said that advanced economies appeared to have room to raise more revenue by increasing taxes on the rich, noting that a 10 per cent tax hike in 15 eurozone member countries would allow them to reduce their deficits to pre-crisis levels.

The suggestion, tucked inside the IMF's Fiscal Monitor report, triggered a barrage of comment, with some seeing a major shift in IMF austerity policy and others accusing the global lender of endorsing a leftist "Robin Hood" tax on the wealthy.

Murray sought to tamp down the debate. "That's a staff analysis suggestion... it's not a policy statement from the Fund," he said.

In the report, the IMF said that "scope seems to exist in many advanced economies to raise more revenue from the top of the income distribution", citing "steep cuts" in top rates since the early 1980s.

According to its estimates, taxing the rich even at the same rates during the 1980s would reap fiscal revenues equal to 0.25 per cent of economic output.