by Modern Monetary Theory (MMT) has gained prominence since the global financial crisis. The rising star US politician Alexandria Ocasio-Cortez said recently we should be “open” to its ideas, and some mainstream economists have given it a (qualified) endorsement. For many, it offers a powerful critique of the damaging austerity policies that were implemented in the western world since the global financial crisis, and an important plank of new progressive thought. MMT also has many critics. For the tax justice movement, however, MMT opens an important debate about the role of tax. One of the MMTers’ central arguments — that governments don’t need tax revenues if they want to spend money — seems to conflict with our argument that governments must tax rich corporations and crack down on
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Modern Monetary Theory offers a powerful critique of the damaging austerity policies that were implemented in the western world since the global financial crisis, and it's an important plank of new progressive thought. BUT one of its central arguments — that governments don’t need to raise taxes in order to spend money - contradicts what we know to be true at the Tax Justice Network - that governments must tax the rich, and corporations, and crack down on tax cheating and tax havens in order to pay for roads, schools, teachers and hospitals. In this Taxcast Extra Naomi Fowler discusses Modern Monetary Theory, its contributions and its limits, with Professor of Practice in International Political Economy, City, University of London Richard Murphy (also of Tax Research UK) and John Christensen of the Tax Justice Network.