ODI | Think Change podcast

Can taxation reduce inequality?

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Income inequality is high or worsening within many countries globally. This not only raises serious moral concerns. It also contributes to political instability and undermines inclusive economic growth.

Governments can use taxation to reduce inequality. They do this by taxing people fairly and spending a share of the revenue on social safety nets for the poor, sick, unemployed or those most impacted by negative shocks, such as Covid-19 the climate emergency, and by investing in human capital through education and health. 

But many lower income countries cannot afford comprehensive social safety nets. Their options are limited because of rising costs of borrowing and narrow tax bases. This means not enough revenue is collected and not everyone pays their fair share.

In this episode, guests examine how lower income countries can build more effective tax and transfer systems that can support fairer, more resilient and sustainable societies. 

The episode unpacks what is really meant by tax systems and social spending, why equitable taxation is critical, how governments can go about improving tax and social protection systems in practice. 

Guests 

  • Sara Pantuliano (host), Chief Executive, ODI
  • Hazel Granger ( Senior Research Fellow, ODI)
  • Professor Andrés Velasco (Dean of the School of Public Policy at the London School of Economics and Political Science, and former Minister of Finance, Chile) 
  • Alex Cobham (Chief Executive, Tax Justice Network)

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