Nobel Laureate Abhijit Banerjee, Taxation and Poverty

Nobel Laureate and Professor at MIT, Abhijit Banerjee stressed the importance of raising the tax in the US to fight poverty. In an article published in Business Standard, Abhijit emphasised the importance of raising taxes as there is no evidence of low taxes promoting growth. The Organisation for Economic Co-operation and Development’s latest report on revenue statistics shows that total US tax income came in at 24.3% of economic output last year, one of the lowest levels among the OECD’s 36 member countries. Further, corporate America relies more on buying back stock rather than increasing spending in research & development. Since 2012, Apple has spent about $1T on stock buybacks which is not creating intrinsic value for shareholders. Trickledown economics has been a little social enabler for promoting social well-being and goodness. Since the 80’s, the gap between the rich and the poor has increased in the US, causing increased domestic and global imbalances in social value.

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