Levying a wealth tax of 1.5 per cent on super rich could help attain the objective...
As many as nine crore people would be out from the state of abject poverty in next 5 years if India could stop inequality from rising and levy a nominal tax on the super riches to narrow the rich and poor divide, a report said today.
Levying a wealth tax of 1.5 per cent on super rich could help attain the objective of raising people out of extreme poverty, development organisation Oxfam India said in its latest report ‘Even it Up: Time to End Extreme Inequality’.
“…research has found that if India stopped inequality from rising, they could lift 90 million more people out of extreme poverty by 2019.
“This is an easy win for the government. By levying a wealth tax of only 1.5 per cent on the 65 super rich, 90 million people can lead a life of dignity and free of poverty” said Nisha Agrawal, CEO, Oxfam India.
The study found that in India, the number of billionaires increased from two in the 1990s to 65 in 2014 and the net worth of these super rich people is enough to eliminate absolute poverty in the country, twice over.
It revealed that more than half of the foreign direct investment (FDI) in India is channelled through tax havens and the government spends almost twice as much on its military as on health.
“Money that can be invested to tackle inequality is diverted by tax breaks and public-private partnerships,” the report said.
Oxfam India said that an urgent action is needed to clamp down on tax evasion by multinational corporations and the world’s richest individuals.
“Global corporations and the wealthiest people must pay their fair share to governments’, so that countries can tackle inequality and build fairer societies,” it added.
A report by UN-ESCAP earlier this month said that the gap between the poor and the rich is growing in the Asia-Pacific region, including India, and there has been an increase in income inequality in many major economies in this region.
According to government data, the poverty ratio in the country declined to 21.9 per cent in 2011-12 from 37.2 per cent in 2004-05 on account of increase in per capita consumption.
In 2011-12, the national poverty line was estimated at Rs 816 per capita per month in villages and Rs 1,000 per capita per month in cities.
This meant people consuming goods and services over Rs 33.33 in cities and Rs 27.20 per capita per day in villages were not classified as poor.