{"id":223568,"date":"2023-01-23T20:48:44","date_gmt":"2023-01-23T15:18:44","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=223568"},"modified":"2023-02-20T18:44:06","modified_gmt":"2023-02-20T13:14:06","slug":"oxfam-inequality-report-taxing-the-obscenely-wealthy-may-not-be-the-right-solution","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/oxfam-inequality-report-taxing-the-obscenely-wealthy-may-not-be-the-right-solution\/","title":{"rendered":"Oxfam inequality report: Taxing the \u2018obscenely\u2019 wealthy may not be the right solution"},"content":{"rendered":"\n

Source<\/strong>– The post is based on the article \u201cOxfam inequality report: Taxing the \u2018obscenely\u2019 wealthy may not be the right solution\u201d <\/strong>published in The Indian Express <\/strong>on 23rd January 2023<\/strong>.<\/p>\n

Syllabus: <\/strong>GS3- Indian economy and mobilisation of resources<\/p>\n

Relevance<\/strong>– Inequality and taxation structure of India<\/p>\n

News<\/strong>– The article explains the Oxfam \u201cSurvival of Richest report\u201d and analyses its claims regarding the tax structure in India.<\/p>\n

What are some main points contained in the Oxfam Survival of Richest report?<\/strong><\/h2>\n

According to the report, there are now 166 billionaires in India<\/strong>. It is up from 106 in 2020. Wealth is concentrated among the top deciles. Top 30% accounts for 90% <\/strong>of the wealth.<\/p>\n

Globally, 1% are estimated to have captured almost two-thirds of new wealth.<\/p>\n

It argues for a wealth tax<\/strong> and higher taxes on corporates<\/strong>.<\/p>\n

It also argues that indirect taxes are regressive<\/strong>. The paper says that the bottom 50% pays six times more indirect tax as a percentage of income as compared to the top 10%.<\/p>\n

What are the issues regarding the claims put by the report?<\/strong><\/h2>\n

The corporate tax cuts brought the statutory tax rate<\/strong> down from 30% to 25.17%.<\/p>\n

The cost of revenue foregone<\/strong> due to this is estimated at Rs 1.03 lakh crore. However, it is not the equivalent of revenue that would have been realised had there been no incentive<\/strong>. The same revenue would not have been realised in its absence.<\/p>\n

Further, the comparison of corporate tax collections<\/strong> is unfair as the simplified regime for corporate taxes was introduced after 2019.<\/p>\n

The current income tax system exempts incomes up to Rs 5 lakh from tax. The GST rate structure<\/strong> places a higher burden on luxuries.<\/p>\n

The upward trend in the GST collections post 2021, accompanied by higher retail sales of luxury goods, indicates that the tax may be progressive<\/strong>. It is despite the K-shaped recovery<\/strong>.<\/p>\n

An indirect tax can be more efficient<\/strong> in a tax system where compliance in direct taxes is not broad-based<\/strong>. Therefore, the report underplays the importance of indirect taxes.<\/p>\n

Even on direct taxes, India has implemented the surcharge<\/strong> on top incomes taking the marginal tax rate to 42.74%.<\/p>\n

It is also important to inquire into the computations. It is estimated that the total wealth held by India\u2019s richest is Rs 54.12 lakh crore<\/strong>.<\/p>\n

But, there is no clarity regarding the amount of the assets counted as a part of private wealth or held in the form of trusts or companies<\/strong>.<\/p>\n

Merely adding this to wealth does not make it taxable. The legal title may prohibit the authorities from levying such a tax.<\/p>\n

A siloed approach to tax policy<\/strong>, with interlinkages <\/strong>between different taxes is not meaningful. In the past, India has used a wealth tax. But the collections were low. It was costly to implement it.<\/p>\n

Everything is not fixed by taxes. The role of other macroeconomic policies<\/strong>, like low interest rates and regulatory interventions<\/strong>, should not be ignored.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source– The post is based on the article \u201cOxfam inequality report: Taxing the \u2018obscenely\u2019 wealthy may not be the right solution\u201d published in The Indian Express on 23rd January 2023. Syllabus: GS3- Indian economy and mobilisation of resources Relevance– Inequality and taxation structure of India News– The article explains the Oxfam \u201cSurvival of Richest report\u201d… Continue reading Oxfam inequality report: Taxing the \u2018obscenely\u2019 wealthy may not be the right solution<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10500],"class_list":["post-223568","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-indian-express","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1700967889},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/223568","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=223568"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/223568\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=223568"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=223568"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=223568"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}