US Treasury Secretary Janet Yellen on Sunday said that President Joe Biden remains to be undecided about the possibility of imposing a wealth tax in the country amid rising financial disparities in the country with the economy taking a substantial blow during the pandemic. 

Yellen said, “That’s something that we haven’t decided yet,” on the show “This Week” hosted by ABC News. 

She added that Biden “hasn’t proposed a wealth tax, but he has proposed that corporations and wealthy individuals should pay more in order to meet the needs of the economy, the spending we need to do.”

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Members of the Democratic Party, like Senator Elizabeth Warren, have previously proposed the imposition of such a plan that involved taxing 2% of every dollar for individuals with a total wealth that crosses the $50 million mark. Those who have a net worth of more than $1 billion would be directed to pay 3%. 

The Treasury Secretary, in February, in a statement to New York Times said that her preference of taxes could have “very difficult implementation problems” due to which the department will be taking other approaches into consideration.

According to a study conducted by Oxfam, individuals who are on the list of top 10 richest people in the world have collectively gather approximately $540 billion since the beginning of the pandemic, when most of the world was suffering an economic backlash. 

The trillions of dollars spent in government stimulus plans during the pandemic have greatly swollen the federal deficit, and Republicans — who supported stimulus spending during the Trump administration — now warn that the deficits risk becoming unsupportable.

Biden faced a rigid side of partisan politics as no members of the Republican party showed any support for the COVID-19 relief plan during the Senate vote and a similar outcome is expected when his administration tries to materialise the infrastructural and green-energy initiatives. 

But, Yellen noted, the current exceptionally low-interest rates have greatly reduced the cost of government borrowing.

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She emphasised that “Interest payments relative to the size of the economy have remained quite low, no higher than they were back in 2007.” She added that “in the longer run we need to get deficits under control to make sure that our fiscal situation is sustainable.”

Yellen, a former chair of the Federal Reserve, again played down fears that stimulus spending could fuel dangerous levels of inflation, especially as the coronavirus vaccinations of millions of Americans raise hope of an economic boom.

“I think there’s a small risk of inflation,” she conceded. But “the most significant risk we face is a workforce that is scarred by a long period of unemployment.”

Yellen said she “absolutely” does not expect a return to the runaway inflation of the 1970s.

And if lower levels of inflation should emerge, the secretary said, “We have the tools to address it.”