The Impact of Violent Shocks on Progressive Taxation: The Case of the COVID-19 Pandemic

• Grant number: 23/16368-9
• Support Opportunities: Scholarships abroad - Research Internship - Doctorate
• Start date: May 01, 2024
• End date: March 20, 2025
• Field of knowledge: Humanities - Political Science - Public Policies
• Principal Investigator: Lorena Guadalupe Barberia
• Grantee: Luiz Guilherme Roth Cantarelli
• Supervisor: Emmanuel Saez
• Host Institution: Faculdade de Filosofia, Letras e Ciências Humanas (FFLCH). Universidade de São Paulo (USP). São Paulo , SP, Brazil
• Institution abroad: University of California, Berkeley (UC Berkeley), United States
• Associated to the scholarship: 22/06523-4 - Inequality and the COVID-19 Pandemic: Comparative Likelihood Analysis of the Implementation of Redistributive Policies, BP.DR

Abstract

In the aftermath of the COVID-19 pandemic, a crucial question emerges: Is it possible that the pandemic will lead to more progressive taxation worldwide? The adoption of large-scale cash transfers and other social spending, along with decreasing government revenue due to economic shrinking, has led to fiscal dilemmas on a global scale. Employing a comprehensive comparative approach, the project will explore the mechanisms for the implementation of progressive tax reform, due to its substantial potential impact on wealth and income redistribution. Drawing parallels with historical periods of post-war reconstruction, this study aims to examine possible emerging societal pressure, particularly from the economically vulnerable segments disproportionately affected by the crisis, for wealthier individuals to contribute more through taxes, potentially leading to the adoption of tax reforms. Through the analysis of the interplay between the COVID-19 pandemic, economic challenges, and emergency spending demands that have strained governments' fiscal capacities, the project explores the pandemic as a possible window for the adoption progressive taxation.