Thursday, August 20, 2009

New Tax Hikes on the way says International Monetary Fund

According the their website:

  • The International Monetary Fund (IMF) is an organization of 186 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
What the IMF Does
  • The work of the IMF is of three main types. Surveillance involves the monitoring of economic and financial developments, and the provision of policy advice, aimed especially at crisis-prevention. The IMF also lends to countries with balance of payments difficulties, to provide temporary financing and to support policies aimed at correcting the underlying problems; loans to low-income countries are also aimed especially at poverty reduction. Third, the IMF provides countries with technical assistance and training in its areas of expertise. Supporting all three of these activities is IMF work in economic research and statistics.
  • In recent years, as part of its efforts to strengthen the international financial system, and to enhance its effectiveness at preventing and resolving crises, the IMF has applied both its surveillance and technical assistance work to the development of standards and codes of good practice in its areas of responsibility, and to the strengthening of financial sectors.
  • The IMF also plays an important role in the fight against money-laundering and terrorism
Below is the first 3 paragraphs of a story from the Toronto Star online edition of August 19/09.
OTTAWA–The International Monetary Fund says most countries will need to raise taxes to pay off the trillions of dollars they spent fighting the global recession.
IMF chief economist Olivier Blanchard says in an article to be published today that governments acted properly in ramping up spending to stop the worst slump since World War II.
Soon, he says, nearly all countries will have to raise taxes to pay the recovery bill.
Canada's Finance Minister Jim Flaherty has rejected the idea he will have to raise taxes to pay off about $47 billion in stimulus spending.

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It will be interesting to know how Canada's Finance Minister Jim Flaherty intends to pay for the huge deficits he himself has forecast. If new taxes are out, what cutbacks are in?