Wealth Tax on Ultra-Rich : To tackle ‘gross inequality’ and create fiscal space for more social investment, India needs to introduce an annual wealth and wealth tax, both (Wealth Tax on Ultra-Rich) of which are required in addition to taxes equal to just 10 million assets. According to an article from Earth Lab.
The article by economists Thomas Piketty, Nitin Kumar Bharti, Lucas Chancel and Anmol Somanchi was published in the midst of general elections in the country, which sees the debate on income as a tool for redistribution. However, major parties opposed this idea. In contrast, economists recommend applying an annual estate tax of 2 percent to assets over $10 million and 33 percent to assets over $10 million.
India should introduce wealth tax on ultra-rich !
“According to our estimates, this alone would account for 2.7% of the country’s gross domestic product (GDP) income.”
At the moderate level and relative to desired changes, the tax system would be more progressive with higher taxes. “In the medium term, the proposal includes, for example, an increase in the inheritance tax rate from 2 percent to 4 percent for assets over 100 million, and a 45 percent tax on assets over 100 million,” he said. This system would generate 4.6% of GDP per year. “Limited but high tax rate (3-5% for wealth tax, 45-55% for wealth tax) taxes can be up to 6.1% of GDP.
The authors say their recommendations would affect only 0.04% of adults, meaning 99.96% of the population would not be affected by smoking. The report states that only the top 0.04 percent (that is, those whose assets exceed 10 million) own a quarter of the country’s total wealth. “Their total assets constitute 125% of India’s GDP,” he said.
If implemented, this amount (Wealth Tax on Ultra-Rich) could be large enough to nearly double India’s public education and public health budgets, in which it has invested very little by global standards.
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