A Wealth Tax Isn't the Right Way to Pay for the Pandemic
When the coronavirus-fueled recession has passed, governments will want to find the fairest way to raise taxes to cover the costs. A simple wealth tax isn’t the answer.
A time will come to figure out how to cover the cost of draconian lockdowns.
Photographer:Andreas Solaro/AFP via Getty Images
An epidemic is often referred to as a “great leveler” since viruses infect people indiscriminately regardless of their net worth. However, the economic consequences of the Covid-19 pandemic will be very asymmetric, as the draconian lockdowns to slow the outbreak hit various sectors of the economy differently.
For now, politicians have rightly avoided any discussions about how to spread the cost of the crisis, instead prioritizing higher spending to mitigate the shock. But, when the health emergency is finally over, one can expect calls for making sure the exceptional expenses are fairly redistributed to grow louder. And while it’s natural to turn to the tax system to allocate losses more evenly, it’s essential that governments think carefully about what exactly has driven inequalities during the lockdowns so that they don’t inadvertently make matters worse.