Pandemic Fuels Big Government Appetite Even If It Means More Tax
U.S. President Joe Biden’s plan to hike taxes on the rich to pay for family aid may be tapping into a global shift in appetite for big government.
An OECD report on Wednesday showed the economic disruption from the Covid-19 pandemic combined with heightened concerns about health and finances is fueling demands for greater government spending in most of the world’s richest countries. That’s despite an awareness it could mean more tax.
The survey -- covering more than 25,000 people aged 18 to 64 from 25 countries in the Organisation for Economic Cooperation and Development -- showed 37% reported their household has experienced at least one job-related disruption.
Of those whose household lost a job, 60% said they want governments to spend more, or much more, to provide better unemployment support. Even among those unaffected by job loss, 48% wanted more spending.
Across the entire sample, 22% said they would pay an additional 2% of their income in tax for employment programs, and 45% said they would pay that for health programs.
“Many people are dissatisfied with their government’s provision of social protection,” the OECD said. “Most would prefer a more expansive and higher quality safety net, even if they have to pay for it in the form of higher taxes.”
The Paris-based organization said there is now a risk of “entrenched economic insecurity” -- 81% of those whose household lost a job during the crisis said they are somewhat or very concerned about their overall financial, social and economic well-being in the next year or two.
More than 60% of the same group said they’re worried about having the skills for a secure job a decade from now.
“Without the continuation and expansion of strong policy responses, people in OECD countries may suffer the economic effects of COVID-19 for years to come,’ the organization said.
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