WASHINGTON (Reuters) -The International Monetary Fund on Thursday said the U.S. Federal Reserve should not cut interest rates until "late 2024" and the government needs to raise taxes to slow the growing federal debt - including on households earning less than President Joe Biden's $400,000-a-year threshold. The prescriptions came in the detailed staff report from the IMF's annual "Article IV" review of U.S. economic policies released on Thursday. The Fund has been emphasizing in recent weeks the need for more fiscal prudence as U.S. deficits continue to grow despite robust economic growth and as Republicans and Democrats formulate tax and spending proposals ahead of November's presidential election.
    • Ranvier@sopuli.xyz
      3·
      4 months ago

      Their proposals are in the article

      The IMF, which often requires fiscal prudence among its borrowing countries, recommended a series of options to lower deficits, including reducing some longstanding tax deductions and exemptions that it said were “poorly targeted.” These include tax exemptions for the value of employer-provided healthcare plans and capital gains on the sale of a primary residence, and deductions for mortgage interest and state and local taxes - breaks that add up to about 1.4% of U.S. GDP per year.

      The U.S. should consider closing the “carried interest” provision under which investment partnership income can be taxed at lower capital gains income rather than normal income, the IMF said. It added that corporate tax rates should be raised and the corporate tax system shifted to a cash flow tax.

      The IMF also recommended raising federal excise taxes on gasoline and diesel, which have not been raised since 1993.

      On the expenditure side, the IMF recommended indexing Social Security benefits to the chained consumer price index and subjecting earnings greater than $250,000 a year to payroll taxes.

      So kind of a mix of good and bad. But raising corporate taxes was one thing. A lot more reasonable than I was expecting.