Idea of super-rich tax gets tide of support

Proposals to impose a levy on the super-rich have been debated for a long time, and according to a recent survey, are widely supported across the world.

According to the Earth4All initiative and Global Commons Alliance, 68 per cent of people across the world’s largest economies, including 74 per cent in India, support the idea of a tax on the super-rich to address global hunger, inequality, and the climate crisis.

Brazil, the current G20 president, is expected to push the idea of a global 2 per cent tax on the super-rich at a meeting of the group’s finance ministers next month. It should be noted that there is greater support for the idea in India than in other countries. About 71 per cent of Indians endorse universal basic income, and there is similar support for climate change policies and actions and investment in health and the environment.

Such surveys reflect public sentiment, and should guide the official policy of political parties and governments. During the election campaign, there was some discussion on the idea of an inheritance tax and the proposal for a tax on the super-rich. The proposal for such taxation is based on increasing inequality and unequal distribution of wealth.

A recent study by the World Inequality Lab found that India is now more unequal than it was during the British Raj. It also proposed the taxation route to address the problem of inequality.

It is estimated that a 4 per cent tax on dollar billionaires (less than 1,000 families) would generate revenues of 1 per cent of the GDP, which is equal to the total public health spending by Union and state governments. There is a widely held misunderstanding that a super tax would affect the middle class and the higher middle class — but the proposal, as it is conceived now, is aimed only at a few ultra-rich.

The existing tax system is said to favour the rich. It is estimated that a poor person’s contribution to tax and tax-related expenditures is proportionately more than that of any rich person. The survey also shows the importance people attach to investments in health, the environment, and climate change.

It is also a vote for welfarist policies and tax justice. Taxation policies, public spending on health, the environment, and climate change are not issues favoured in political campaigning.

Politics in India has hardly recognised climate change as a theme. The survey shows that people attach importance to matters that affect their lives. They are ahead of governments and politics which should now catch up with them.