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Tax policy for the post-Covid era

Published on February 10, 2021 Updated on April 21, 2021

on the February 8, 2021

Rabah Arezki and Grégoire Rota-Graziosi explore what the legacy of Covid-19 will be for our tax systems and several dimensions for the required rethinking

At the end of World War I, Schumpeter (1918) coined the term “thunder of history” to describe the historical roots of fiscal systems. Indeed, wars, revolutions or disasters persistently shape domestic tax systems. For instance, the two world wars gave way to new taxes notably the income tax which are still in existence and reflect the thundering of history. Fast forward to today, fighting Covid-19 is in many ways analogous to fighting a war. One might thus wonder what the legacy of Covid-19 would be for our tax systems ten or twenty years from now.