growth: instead, the International Monetary Fund (IMF) found that "the combined direct and indirect effects of redistribution, including the growth effects of the resulting lower inequality, are on average pro-growth".126 Indeed, more recent research has generalized findings initially focused on OECD countries, which concluded that the concentration of incomes at the top impeded growth, whereas growth in contrast was stimulated by increasing the portion of total wealth going to the lowest quintile of the population or to the middle class. Consistent with the expectations of Keynesian macroeconomics,127 researchers from the IMF thus found "an inverse relationship between the income share accruing to the rich (top 20 percent) and economic growth": If the income share of the top 20 percent increases by 1 percentage point, GDP growth is actually 0.08 percentage point lower in the following five years, suggesting that the benefits do not trickle down. Instead, a similar increase in the income share of the bottom 20 percent (the poor) is associated with 0.38 percentage point higher growth. This positive relationship between disposable income shares and higher growth continues to hold for the second and third quintiles (the middle class).128 There is no tradeoff, therefore, between the understandable desire of low-income countries to grow their economy, and the reduction of inequality within these countries by progressive taxation and redistribution schemes. Yet, for many governments, progressive taxation with powerful inequalityreducing impacts may be difficult to achieve. Capital is more mobile than labour and households, and it is therefore tempting to reduce the levels of taxation of capital, particularly by lowering the corporate tax and the personal income tax for the highest income earners,129 while compensating this by increasing the taxation of middle-class wage-earners and households. Moreover, indirect taxes (such as VAT) are easier to collect, and therefore, despite their regressive impacts (since poor households spend a higher proportion of their incomes on buying consumer goods130), they may be the preferred way for governments with a weak administrative capacity to collect revenue. Such indirect taxes are also politically less unpopular, because they are included in the end price consumers pay and therefore often go largely unnoticed. The result however is that we have fiscal policies that, instead of shifting more of the tax burden on to the wealthiest corporations and the richest individuals, as both economic common sense and human rights would require, end up taxing wage earners and consumers through VAT, with generally regressive consequences.131 According to calculations of the World Bank, the average total tax rate payable by businesses on their commercial profits decreased globally from 53.5 % to 40.8 % between 126 Report of the Special Rapporteur on extreme poverty and human rights, Magdalena Sepulveda Carmona, presented at the 26th session of the Human Rights Council (A/HRC/26/28) (22 May 2014), para. 40, citing Jonathan D. Ostry, Andrew Berg and Charalambos G. Tsangarides, “Redistribution, Inequality and Growth”, IMF Staff Discussion Note, February 2014 (International Monetary Fund, Washington, D.C., 2014). See also Andrew Berg and Jonathan D. Ostry, "Inequality and Unsustainable Growth: Two Sides of the Same Coin?", IMF Staff Discussion Note 11/08 (International Monetary Fund, Washington, D.C., 2011). 127 See above, text corresonding to note 7. 128 IMF Staff Discussion Note, Causes and Consequences of Income Inequality: A Global Perspective (Era Dabla-Norris, Kalpana Kochhar, Nujin Suphaphiphat, Frantisek Ricka, Evridiki Tsounta), June 2015, at 7. 129 International Monetary Fund, Policy Paper Fiscal Policy and Income Inequality, Jan. 2014, at 37 (estimating that top personal income taxes were lowered by about 30 % on average since 1980). 130 Diane Elson, Radhika Balakrishnan and James Heintz, "Public Finance, Maximum Available Resources and Human Rights", in Nolan, O’Connell & Harvey, Human Rights and Public Finance: Budgets and the Promotion of Economic and Social Rights, cited above note 4: 13-39, at 28; Ignacio Saiz, "Resourcing Rights: Combating Tax Injustice from a Human Rights Perspective", in Id.: 77-104, at 84. 131 It is important to note, however, that although VAT taxes are regressive when calculations are made on income (the poorest households contribute more as a proportion of their income), this regressivity either disappears or is significantly attenuated when calculated on the basis of consumption (that is, the higher levels of consumption of the rich and the high VAT rates on luxury items that are only affordable to the rich, leads to a situation in which the rich contribute more to the revenues collected through VAT than the poor). See Ana Corbacho, Vicente Frebes Cibils and Eduardo Lora (eds), More than Revenue: Taxation as a development tool, cited above note 115, at 167-168. In other terms, a more appropriate prescription to governments would be to raise VAT on luxury items and to lower it on essential items, while at the same time ensuring that increases in indirect taxes do not become a substitute for progressive direct taxation. 29