Tidbits | wealthymatters

The History Of Inheritance Tax in India

January 6, 2013 Leave a comment

wealthymatters,com

With rising fiscal deficit, fiscal consolidation is suddenly front page news. The government hasn’t done well in its attempts to raise revenues both tax and non tax.The sense of alarm has brought back discredited ideas centre-stage.One of these ideas is a tax on inheritance,a favourite hobby horse of the Leftists.No matter that it was overextending ourselves on repackaged Garibi Hatao welfare measures with a proven record of ineffectiveness that brought us to the fiscal mess in the first place.Inheritance tax is being touted in the UK,US,Germany,Italy etc as a measure to claw their way out of recession.Small wonder that there is a clamour by the intellectually bankrupt for its reintroduction in India. Read more of this post

Filed under Tidbits Tagged with death duty, demonizing the rich, estate duty, fiscal consolidation, Fiscal Deficit, gifts, inheritance tax, inter generational equity, inter generational wealth transfer, postaday, tall poppies, Tax shelters, trusts, wealth envy

Some Questions

January 5, 2013 2 Comments

wealthymatters

Did you happen to catch the headlines of today’s ET ?Else here is the link.Its had me pretty steamed up the whole day.

Its no secret that the government is in a financial mess of its own making.Its also true that the general elections are within sighting distance and the government feels the need to be seen to be doing something. Addressing vote banks is obviously a priority.But just how far should a government be allowed to go in its desire to serve itself?

My questions are simply these:

1.)How many of our rich will hang around to be taxed?How many will migrate or otherwise arrange their affairs so as not to be liable for higher tax payouts?At a time when many industrialists prefer to invest abroad since setting up business in India is so cumbersome do we want to drive out more businesses from India What about the lost opportunity to tax these enterprises,if only at marginal rates?What about the lost opportunities for employment of our own people? Read more of this post

Filed under Tidbits Tagged with Arvind Panagariya, gold bubble, Gujarat Model, Higher taxes on the rich, India’s Tryst With Destiny: Debunking Myths that Undermine Progress and Addressing New Challenges., inheritance tax, Jagdish Bhagwati, Kerala Model, postady, property bubble, Rajiv Gandhi Equity Savings Scheme, redistributing wealth, tax avoidance, tax exiles, tax on dividends

Urjit Patel on Inflation

January 4, 2013 Leave a comment

wealthymatters.com

Here are some bon mots from our new Dy. Governor of the RBI:

“Assertions that imported inflation and external developments — like global excess liquidity — lie at the root of price developments in India ring hollow.”

“What is clear is that persistence of elevated inflation is agreeable to some policymakers.The authorities want to take credit for India’s growth performance but stay blameless on the price front — a case of heads I win, tails you lose!”

“This is an astonishing series of nihilistic statements — unassisted by evidence or even a hint of scientific thoroughness — from the central bank head pleading either hopelessness on account of India being a large and diverse federal entity, or, a form of muddled eclecticism.”

“The profligacy of the central government has its primary driver in populist spending policies initiated in early 2008 by the ruling coalition leading up to national elections in May 2009.”

“Three stimulus packages (including a reduction in indirect tax rates) starting in late 2008 to counter the global recessionary head winds only accentuated matters.”

“If gold prices stay elevated or increase going forward, and wealth effects emanating from this externally generated feature are quantitatively important, than monetary policy has that much more work to do to tame inflation.”

These are heartening words indeed for those of us concerned about the detrimental effects of our persistently high inflation even as growth prospects have muted.