The first is a "solidarity tax" proposed by the IMF, and designed to fix the income gap between rich and poor that has widened over the past year.
It proposes rich nations like the U.S. and U.K. introduce a "temporary surcharge" on income tax as well as an increase to property and inheritance taxes to "promote fairness and protect the environment."
A symbolic and temporary tax rise would "strengthen social cohesion," the IMF believes, as it would make those that have profited during the pandemic help businesses that have lost out.
Those that would be taxed more should include companies that "prosper during the crises, such as pharmaceutical and highly digitized businesses," the IMF said on Wednesday (7 April).
"The main target for this sort of taxation is, of course, the U.S. based ‘FAANG’ (Facebook, Amazon, Apple, Netflix NFLX -1% and Alphabet) companies who are already being targeted outside the U.S. through various digital service tax proposals and laws," says Adam Dunnett, director at Zedra, a fund services provider.
But the IMF's idea is unlikely to be adopted in the U.S., says Dunnett, since the Biden administration "will repeat some of the arguments it has used in response to digital services taxation," not least its own proposal for a global corporation tax.