Levying wealth tax on super rich unlikely to bridge economic disparity
Levying a wealth tax on super rich may not be the best way to bridge economic disparity in the society, opine economists and tax experts. They believe that implementation of wealth tax is fraught with practical difficulties and may reduce the investible income in the hands of the rich who are already paying income tax at a maximum marginal rate of 42.7 per cent. Instead, allocation for expenditure can be raised to distribute benefits to the low-income population. More income in the hands of the middle and higher income categories would also lead to employment creation and higher consumption. Recently, Oxfam India had recommended taxing the wealth of the richest one per cent on a permanent basis, with higher rates for millionaires, multi-millionaires and billionaires.