{"id":58270,"date":"2024-05-24T19:20:29","date_gmt":"2024-05-24T19:20:29","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/05\/24\/no-vote-bank-threat-less-capital-flight-risk-from-wealth-tax-nitin-kumar-bharti\/"},"modified":"2024-05-24T19:20:29","modified_gmt":"2024-05-24T19:20:29","slug":"no-vote-bank-threat-less-capital-flight-risk-from-wealth-tax-nitin-kumar-bharti","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/05\/24\/no-vote-bank-threat-less-capital-flight-risk-from-wealth-tax-nitin-kumar-bharti\/","title":{"rendered":"No vote-bank threat, less capital-flight risk from wealth tax: Nitin Kumar Bharti"},"content":{"rendered":"
\"No<\/div>\n
There will be no vote-bank threat<\/a> if a tax is imposed on the assets of the wealthy, as it will not impact 99.96% of the population, says Nitin Kumar Bharti, the lead author of a recent World Inequality Lab<\/a> report that suggests imposition of a wealth tax<\/a> to correct inequalities in India. Studies also show that such a tax causes little capital flight<\/a>, he tells ET<\/a>. Edited excerpts:

India’s past experiments on wealth tax haven’t worked; why do you think this could?<\/strong>
Wealth tax hasn’t worked for several reasons – limited purview, easier evasion<\/a> and, most importantly, lack of a strong government<\/a> will. Today, evasion is less of a concern due to technological advancements, such as Aadhaar<\/a> linkage and computerisation of land records and stock market trading. We propose to tax overall net wealth<\/a>, not keeping any asset out of the purview.

But haven’t wealth taxes failed in developed countries as well?<\/strong>
The narrative is changing now, and there is more debate about bringing back the repealed wealth taxes to tame the rising wealth inequality.

Don’t you think this would lead to a wealth drain?<\/strong>
Capital flight is less of an issue as the “net wealth” is computed irrespective of the location, that is tax is proposed on worldwide assets. One could avoid double-taxation concerns. Often, people have reasons to keep their capital and assets in a certain country, so we don’t know how much of an issue capital flight would be anyway. Studies have shown that fiscal repatriation-related international migrations are very small.

What can the government do to make this viable, especially as the ultra-rich<\/a> can use trusts<\/a> to lower tax liability?<\/strong>
Since the proposed tax does not impact 99.96% of the population, there is no vote bank threat. On the issue of trusts, a lot of improvement is required to fully design the taxation.

Shouldn’t a tax correspond with income and not just remain a function of wealth?<\/strong>
A desirable way (to determine tax liability) would be to have some function of income and wealth, which will require such data at the individual level. We are proposing a separate wealth tax, as such a consolidated dataset exists in India. In the earlier working paper, we have proposed income tax<\/a> returns to move in this direction, where information on net wealth is also captured.<\/div>\n


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There will be no vote-bank threat if a tax is imposed on the assets of the wealthy, as it will not impact 99.96% of the population, says Nitin Kumar Bharti, the lead author of a recent World Inequality Lab report that suggests imposition of a wealth tax to correct inequalities in India. Studies also show […]<\/p>\n","protected":false},"author":2,"featured_media":58271,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","fifu_image_url":"https:\/\/img.etimg.com\/photo\/msid-110406700,imgsize-565767.cms","fifu_image_alt":"","footnotes":""},"categories":[602],"tags":[19706,22417,56817,56822,24228,22974,3954,1814,19347,2720,56818,20723,1115,301,2888,11135,56819,56816,56821,10976,56815,56820],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/58270"}],"collection":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/comments?post=58270"}],"version-history":[{"count":1,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/58270\/revisions"}],"predecessor-version":[{"id":58272,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/58270\/revisions\/58272"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media\/58271"}],"wp:attachment":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media?parent=58270"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/categories?post=58270"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/tags?post=58270"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}