Sam Pitroda's 'inheritance tax' idea, fresh ammo for BJP, Congress on back foot

Indian Overseas Congress chief Sam Pitroda suggested a US-like inheritance tax in India even as the Congress distanced itself from his remarks.
Sam Pitroda's 'inheritance tax' idea, fresh ammo for BJP, Congress on back foot
Jaano Junction

Amid a political slugfest over Congress's "wealth redistribution" poll promise, Indian Overseas Congress chairperson Sam Pitroda has advocated a US-like inheritance tax in India. However, Pitroda came under fire from the BJP even as the Congress distanced itself from his remarks.

In an interview with ANI, Pitroda defended Congress's poll promise, saying the policy of redistribution of wealth was in the interest of the people and not in the interest of the super-rich only.

Elaborating on the concept of inheritance tax in some American states, Pitroda said, "If one has $100 million worth of wealth and when he dies he can only transfer probably 45% to his children, 55% is grabbed by the government. That's an interesting law. It says you, in your generation, made wealth, and you are leaving now, you must leave your wealth for the public, not all of it, half of it, which to me sounds fair."

"In India, you don't have that. If somebody is worth 10 billion, and he dies, his children get 10 billion and the public gets nothing... So these are the kind of issues people will have to debate and discuss," he further said.

In the US, only six states have inheritance tax. There is another tax called estate tax, also called "death tax", that is levied on one's right to transfer property after death. (Both the taxes are explained below)

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Sam Pitroda's 'inheritance tax' idea, fresh ammo for BJP, Congress on back foot

Hitting out at Prime Minister Narendra Modi for his "politics of appeasement" jibe at Congress over the poll promise, Pitroda said, "It's naive to think like that... I have some concerns about his brain."

Pitroda said that the subject of wealth distribution was a "policy issue" while underscoring the need for a "minimum wage" in India.

"The Congress party would frame a policy through which the wealth distribution would be better. We don't have a minimum wage (in India). If we come up with a minimum wage in the country saying you must pay so much money to the poor, that's the distribution of wealth," he said.

"Today, rich people don't pay their peons, servants, and home help enough, but they spend that money on vacation in Dubai and London... When you talk about the distribution of wealth, it is not that you sit on a chair and say I have this much money, and I'll be distributing it to everybody," Pitroda further said.

Pitroda's remark triggered a political firestorm, with the BJP warning people of "property snatchers". "Voting for Congress = Losing your Money + Property + Belongings! Voters be aware, property snatchers are here!" BJP spokesperson Jaiveer Shergill tweeted.

Union Home Minister Amit Shah also raked up Pitroda's remarks and asked Congress to withdraw its financial survey promise from the manifesto.

"The entire Congress has been exposed due to Sam Pitoda's statement. When PM Modi raised the issue, Rahul Gandhi and Priyanka Gandhi went on the backfoot. I hope Congress will withdraw this thing from its manifesto," Shah said.

BJP's Shehzad Poonawalla said the Congress wanted to "grab your hard-earned tax-paid resources".

"Ironically, the Gandhis built a huge treasury for their own children and son-in-law, but they want to grab your hard-earned tax-paid resources," he tweeted.

Amid the controversy, Pitroda clarified that the US inheritance tax had nothing to do with the Congress manifesto.

Reacting to BJP's criticism, Pitroda said, "Who said 55% will be taken away? Who said something like this should be done in India? Why are the BJP and the media in panic?"

"I mentioned US inheritance tax in the US only as an example in my normal conversation on TV. Can I not mention facts? This has nothing to do with the policy of any party, including Congress," he said.

The Congress, on the backfoot, said Pitroda's views do not always reflect the position of the party.

"Sam Pitroda expresses his opinions freely on issues he feels strongly about. Surely, in a democracy, an individual is at liberty to discuss, express, and debate his personal views," Congress communications in-charge Jairam Ramesh said.

"This does not mean that Pitroda's views always reflect the position of the Congress. Sensationalising his comments now and tearing them out of context are deliberate and desperate attempts at diverting attention away from Narenda Modi's malicious and mischievous election campaign; that is anchored ONLY in lies and more lies," Ramesh further said.

Congress president Mallikarjun Kharge accused the BJP of "playing games" just for "votes". "... There is a Constitution, we don't have any intention. Why are you putting his ideas in our mouths? Just for votes, he is playing all these games," Kharge said.

The United States has two types of tax -- estate tax and inheritance tax. Around a dozen US states have estate taxes and six have inheritance taxes.

An estate tax, also known as the "death" tax, is a federal tax imposed on property transferred after the owner's death. The tax is owed by the estate, not by the beneficiaries. The federal estate tax ranges from 18% to 40%.

On the other hand, inheritance tax is levied on someone who has inherited money, property, or other assets. It is applicable only when the person dies and passes on assets in the states that have an inheritance tax. It is not dependent on where the beneficiary lives. 

Source: India Today

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