WP-01-2020: How to pay for the consequences of a pandemic?: A preliminary approach to analogies in the past and alternatives for the future

Uncertainty around this unique crisis make us to resort to analogies with exceptional events happened in the past in search for guidance. War may be the best analogy that we can handle right now to try to understand the dynamics and possible consequences of the crisis, even though -as we will see- the circumstances differ in fundamental aspects, conditioning the possible options to finance the consequences of the pandemic (taxes, debt, inflation). This crisis began like a war and will continue as an economic crisis, and the initial conditions of the economy at the breakout of this crisis where not easy, just coming out of a global financial crisis and facing numerous challenges, climatic, commercial, technological and political. In the last section we identify some possible alternatives to answer the question in the title of the article: Orthodox (classic) economic measures -broadening tax bases; growth friendly taxation, general consumption and immovable property taxes; reducing tax fraud and strengthening tax administration-; Recent (potential) trends -green taxation; digital taxation and antidownward international tax competition measures; progressive taxation on high incomes and wealth taxation-; Non-orthodox taxation (minimum taxation rules; financial transaction taxes; export duties; windfall taxes; exit taxes); and “Free lunch” (whatever it takes) measures -permanent stimulus and public debt; helicopter money-.

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