This election season is witnessing intense fireworks with political parties gunning for each other. Amid the heat of the Lok Sabha poll campaign, the electoral discourse got occupied by Congress leader Sam Pitroda’s advocacy of the inheritance tax in India and its vehement counter by Prime Minister Narendra Modi in the poll rallies. Pitroda, the Chairman of the Indian Overseas Congress who is also considered close to Rahul Gandhi, created a massive storm recently with his remarks on inheritance tax in America. Pitroda has said that in the United States, there is an inheritance tax according to which the US government is entitled to claim 55 per cent share of a person’s wealth while the owner can transfer only 45 per cent share to his children or family. He also termed the inheritance tax, as practiced in the US, as an ‘interesting idea’ and called for the ‘need for greater discussion’ on it.
Speaking to media persons, Pitroda had said: “In America, there is an inheritance tax. If someone has $100 million in wealth and passes away, they can only transfer about 45 per cent to their children; the government takes the remaining 55 per cent. It’s an interesting law. It suggests that you’ve accumulated wealth in your lifetime, and upon your departure, a portion of it must be left for the public — not all of it, but half, which seems fair to me.” His remarks on inheritance tax came in response to Prime Minister Modi’s charge that the Congress party was planning to redistribute the nation’s wealth to the minorities, if voted to power. Caught in the bind, Congress communications chief Jairam Ramesh said there was “no plan whatsoever to introduce an inheritance tax”. While the grand old party distanced itself from Pitroda’s comments on inheritance tax terming it a “personal opinion”, BJP leaders took turns to hit out at the Congress leader.
Pitroda’s remarks on the concept of inheritance tax in the US have been lapped up by the BJP to reinforce its wealth distribution attack on the Congress. The matter has gained steam after Prime Minister Modi alleged in election rallies that the Congress plans to conduct a survey and put into motion a wealth redistribution plan. Modi has also claimed that property and jewellery owned by citizens would be surveyed, taken away and redistributed. Importantly, such a tax has not found a place in the Congress party’s manifesto. The manifesto calls for a nationwide socio-economic and caste Census to provide the data foundation for affirmative action. It does not, however, mention any wealth redistribution plan. India did have an inheritance (or death) tax once. The tax, which was known as estate duty, was introduced in 1953, and was abolished in 1985 by the government of Rajiv Gandhi.
