IMF: "Taxing The Rich Is Good For The Economy, Helps The Poor to Support Their Children Going to School"

New direction and some quote from IMF as act against income inequality, The International Monetary Fund came out Wednesday in support of the fight against income inequality, with Fund economists saying income redistribution efforts can strengthen economic growth.

As reported from Business Insider, Plunging into a debate over the gap between rich and poor that is fueling political battles from the United States to Brazil to Thailand, economists from the Fund said there is already general agreement that inequality can fuel economic and political instability.

But do policies to redistribute income help or hurt growth? asked economists Jonathan Ostry, Andrew Berg and Charalambos Tsangarides.

The answer, they said, is a net gain, even if there is an initial cost to an economy from taxes and transfers which aim to close an income gap.

"While considerable controversy surrounds these issues, we should not jump to the conclusion that the treatment for inequality may be worse for growth than the disease itself," they said in a research paper, "Redistribution, Inequality, and Growth", and an accompanying blog comment.

"Equality-enhancing interventions could actually help growth."

The trio cited the benefits of taxes on activities of the wealthy that could hurt an economy, like excessive financial speculation, and payments to the poor to support their children going to school, so far this is logic and fair enough

What do you think?