Starting Inheritance tax -A Revolutionary Step

I think it is high time that the government of India impose inheritance tax and I am sure a system can be worked out to not to affect existing business operations (after all we do want to promote private businesses)... The problem is more than social injustice, it is a state sponsored deprivation of fundamental rights to economic equality to those whose parents didn't do well.... Anyone who understands economics will not give a second thought on whethehr to impose inheritance tax or not... the only question is how do we go about the same in a given economic/tax system....

It is rediculous to think that the founders of Infosys and the likes have done so much to the society that their children and the children of their all future generations (assuming they don't mess with their investment) should be given a free ride.. that is what it is... they do not have to work ever...that is the fallacy of capital system and that is why people like Warren Buffet (rich, sensible, compassionate & intelligent) are a big advocates of inheritance tax... you are welcome to google to see what the past leaders of american society have to say on this...

Some of the basic arguments can be found at the following URLs....

https://www.policyalmanac.org/economic/archive/inheritance_tax.shtml

https://www.taxationweb.co.uk/tax-articles/capital-taxes/are-the-tories-right-should-inheritance-tax-be-abolished.html

I wish and really hope that India will go for it very soon... We need it and we owe it to our future citizens....without it, it is same as external long term borrowing that we expect our future generations to pay!!

Thanks

At the moment this is the most thoughtless idea, in a horribly corrupt country like India. This idea will be accepted most happily by the corrupt in government. What better excuse can they get to loot more money legally from people. First we need to end corruption and enforce accountability, transparency rather than thinking of ways how we can increase the ways of income and power for the corrupt. Believe me if corruption is tackled government has enough money for everybodies welfare. When government can blow almost Rs 90,000 crores for CWG, and Kalmadi is boasting to hold Olympics, it shows government has money flowing like water, there is no shortage of money.  MPs and  bureaucRATS are increasing their salaries, not their accountability and transparency. Government is sufferring from shortage of accountability, transparency and fear of people and NOT from shortage of any money/taxes etc.

‘‘Experience should teach us to be most on our guard to protect liberty when the government’s purposes are beneficial ... the greatest dangers to liberty lurk in insidious encroachment by men of zeal, well meaning but without understanding’’— U. S. Supreme Court Justice Louis D. Brandeis, 1928

“Liberty has never come from Government. Liberty has always come from the subjects of it... The history of liberty is a history of limitations of governmental power, not the increase of it.” - Woodrow T. wilson

Dear Democratic Indian,

I understand your emotion about corruption and why you wouldn't want to give more money to the government without eradicating or lowering the corruption... But it must be noted that such an argument can be advanced for any taxing and/or revenue generating ideas by the government..... but so long as we agree to pay taxes ( on which we have no choice) then all taxing proposals must be seen from fairness and equality perpsective rather pure agumendation of revenue.... What if the proposal is to impose inheritance tax and lower the personal income tax (such that the revenue to the government stays the same)? I guess the point of inheritance tax is about understanding of how the system of the economy works and what is fair for the players in it... as I pointed out earlier, there is a reason why people like Warren Buffet say that he will give his son ONLY $100,000/- and college education and nothing more..the rest goes to charity... When he says that he is driven by fairness and equality and not by corruption or effective use of his money....

I am sure if you give it some thought around the effect (of passing on your wealth to your future generations) on those whose parents and grand parents were not fortunate enough to do so, then you will see how serious the issue is...It has nothing to do with revenue or corruption....

"But it must be noted that such an argument can be advanced for any taxing and/or revenue generating ideas by the government....."

I disagree on the following grounds:

1. More taxing does not translate into more benefits to people who need the most. In the present situation poor are not getting beneifts not becuase their is a real shortage of money. They are not getting benefits because artificial shortage is created by misuse of money. If we do mathematics and see, the money wasted on CWG is sufficent to provide free wheat to poor for at least one year. On the contrary, the government is not even interested to implement Supreme Court order to distribute the grain to poor before it gets rotten. Any measure under any color or pretext that gives more power and resources to the corrupt is morally and ethically unacceptable. If government wants more taxes, it has to set its own house in order first.

2. If government wants to generate more revenue, it does not mean it should start taxing more. This is the idea of tyrants. If government wants more revenue, it should run its enterprises more profitably rather than keeping white elephants.

" but so long as we agree to pay taxes ( on which we have no choice) then all taxing proposals must be seen from fairness and equality perpsective rather pure agumendation of revenue..."

I disagree on the following grounds:

1. I disagree the fatalist idea that "we have no choice", if that is the case then we are not under democracy but a tyranny.

2. Fairness and equality perspective also means that their is accountability, transperancy and justice. Our country miserably lacks all of these, and any measure that will strengthen all/ any of these is objectionable, unfair and unequal.

"What if the proposal is to impose inheritance tax and lower the personal income tax (such that the revenue to the government stays the same)?"

The revenue of government will not stay same since people usually inherit large wealth in a single year than what they earn as personal income in a single year. If this idea is implemented the corrupt people with unaccounted wealth under black money, benami property, bogus companies etc. etc. etc. will have a merry time, since on papers they will never inherit anything. They will end up paying even lesser tax on personal income than what they are paying now.

"guess the point of inheritance tax is about understanding of how the system of the economy works and what is fair for the players in it... as I pointed out earlier, there is a reason why people like Warren Buffet say that he will give his son ONLY $100,000/- and college education and nothing more..the rest goes to charity... When he says that he is driven by fairness and equality and not by corruption or effective use of his money...."

1. Capitalist economy works on exploiting those who do not have capital. Period.

2. Warren Buffet or Bill Gates or any such people are not saints they are exceptionally clever, big time hypocrites. Saints who believe in fairness and equality are never able to accumulate wealth for themselves in the very first place. I do not go by what these people say or do not say publicly. What Warren Buffet is saying or doing publicly is very different from what he is saying or doing privately. Nobody will ever know how much black money he has, how much he is giving to his son. These people control more than 98% wealth of their countries and pay less than 2% of taxes. On the contrary ordinary people pay more than 98% of taxes.

"I am sure if you give it some thought around the effect (of passing on your wealth to your future generations) on those whose parents and grand parents were not fortunate enough to do so, then you will see how serious the issue is...It has nothing to do with revenue or corruption.... "

I agree issue is serious and given thought to it. The cause is not that government is getting less revenue, lack of funds etc. cause is bad governance/tryranny that is going on due to corruption, lack of accountability, lack of transparency, lack of fear of people(people have been disarmed with help of Arms Act, like the tyrants do.) Laws disarming honest citizens proclaim that the government is the master, not the servant, of the people. Do you want to strengthen your corrupt master by giving him more taxes?

"Both the oligarch and tyrant mistrust the people, and therefore deprive them of arms." - Aristotle

Before we jump to conclusions we need to go deep into the real motives and the long term implications of this idea. I differ on the following grounds.

1. The economically rising middle class is a clear threat to present power monoply of few ruling families of India. If Indian middle class rises economically and becomes financially independent, to the extent people have free time to indulge in politics because they will have inherited money, it will pose a threat to present politicians. If we see, it is only around 500 families from whom the members of parliament are getting elected time and again. They have their near and dear ones in various political parties, hence it hardly matters if party x or y or z wins, someone of their near and dear ones wins, sits on the seats of power.

2. The economically rising middle class is a clear threat to present power influence and market manipulations by big corporations. If Indian middle class rises economically and becomes financially independent, to the extent people have free time to start their own businesses from the money inherited, they will posse competition threat to these corporatons.

3. The economically rising middle class is a clear threat to big corporations to get well trained labour/employees at cheapest cost. If this middle class becomes financially strong, how will these corporations get quality labour/employees at cheap rates?

4. The biggest consumer/market of these big corporations is the lower/middle class. They constitute more than 98% market because of their "dreams" of big house, car and so on.......Once these people rise above these "dreams" and move on to upper layer, who will buy the goods of these corporations?

Now what is the solution to all these "problems" 1, 2, 3, 4 of financial freedom of middle class to the nexus of corrupt politicians, bureucrats and corporations? How can middle class be forever kept under control so that it can never rise its head? The largest source of income that has potential to make them financially free is inheritence. Tax them were it hurts them most under some grand pretext. It will have the following benefits to the nexus syndicate:

1. The middle class will never have financial strength or time to cause any political threat to entrenched political families. It will be busy working day & night like donkeys and earn money for corporations, who in turn will oil their nexus with the corrupt in power. Hence perpetual slavery/tryanny is established even without declaring it.

2. The middle class will never have financial strength or time to cause any business threat to corporations. It will be busy working day & night like donkeys and earn money for corporations for ever.

3. Since they will be taxed so much, they will never be financially independent, the middle class will forever provide cheap labour/employees to these corporations.

4. Since middle class will know that their future generations will not be able to use much of their inherited wealth, it will be spending that money on buying goods/services of corporations and forever remain their market.

"The ideal tyranny is that which is ignorantly self-administered by its victims. The most perfect slaves are, therefore, those which blissfully and unawaredly enslave themselves." Dresden James.

“When men yield up the privilege of thinking, the last shadow of liberty quits the horizon.” - Thomas Paine

The Indian society being family centric, unfettered inheritance act as a sweet poison, bonding a free person into a ‘dynastic slave’ and in time polarizing wealth and opportunity in society to the point where the social fabric is stretched to breaking point.

Unfettered inheritance is at the root of all corruption in India. The corrupt has a huge reward, of leaving a large wealth for his future generation and has almost no fear of retribution, as the whole society has become corrupt and blindly follows the practice of unfettered inheritance.

Yet inheritance is but a benefit that civilized society offers to its members. At no time must this benefit be allowed to break the society itself.

All the wealth and technology that a well meaning country, group or individual may pour into India, will only lead to,  further acceleration of this pathological polarization.

We all know the Swath Valley in Pakistan was over run but few realize that there were only 48 landlords in the Swath Valley, it is one clear example of the threat that looms over our country.

The concept of ‘daswant’, giving to charity one tenth of our earnings, is commonly known yet one does not see the beneficial effects of this giving on those that most need it. The memory of the ‘bhoodan Movement’ faded along with Acharya Ji and the benefits of ‘Operation Barga’ the land reforms movement in Bengal and Kerala were eroded by the same unfettered Inheritance laws, today land is once again in the hands of the ‘Party Powerful’ and the Maoists are touting their own brand of land reforms.

I mentioned about the situation in the Swat Valley of Pakistan because it is sufficiently ‘distant’ for my country men to look at it objectively, there are many such ‘Swat Valleys’ in India where the dictate of the Government has little impact.

The wester world taxes large inheritance heavily and the wealth so collected adds to the social security, which is totally lacking in India.