Covid And Amphan Are Not Equalisers: Why The Rich Need To Pay Their Fair Share

This is short read. A lot of numbers but it will be worth it, I promise.

1. According to the Income Tax department, in 2019, only 2.5% Indians paid tax. This means a total of 3.3 crore (1 crore = 10 million) people out of a population of 110 crores.

2. The total tax paid was Rs 3,00,000 crores. To give you an idea of the scale, this is 1.5% of India’s GDP (GDP – Rs 20,500,000 crores).

3. Now, the question is: who paid how much and was it fair? We don’t know this exactly. However, what we do know is that 10% of the tax payers, or about 0.3 crore people, paid Rs 2,50,000 crores, i.e. about 1.2% of GDP or 85% of the total tax paid. These are probably the top earners whose incomes are sufficiently high.

4. But, their incomes are not high enough! When we look at income and wealth inequality, we see that 63 super rich Indians own Rs 24,42,200 crore (10% of the GDP), and the richest 1% in India own the same wealth as the poorest 70% Indians.

5. Then, can we really believe that the rich are paying their fair share? Wealth tax in India is an abysmal 1% and the highest income tax slab is 30%. The wealth tax of 63 super rich would then be a mere Rs 25,000 crore (just a little bit higher than the fiscal budget FM Nirmala S. has announced).

6. It is a fact that you and I pay more tax relative to our wealth and income, than the super rich. It is also a fact that the more wealth you have, the easier it is to make more out of it. We’re in a tax system where workers are on an average monthly salary of Rs 10,000, and women and children are doing unpaid labour worth Rs 19,00,000 crore (almost as much as the wealth of 63 richest) in factories.

I don’t know how we accept all of this.

7. In Sweden, the lowest tax is 33% (which I’ve paid), and the highest is 58%. And look at how well they are doing. Sure, even they are facing the problem of marginal wealth tax, but their incomes are more evenly distributed. They can fund free education and hospitals for everyone and not just now, but since the 1930s, when they had the choice of welfare for some or all. We have that choice now!

In the aftermath of Cyclone Amphan, Kalipada Haldar, a resident of Kolkata whose shack got destroyed in the cyclone, said that he would need at least Rs 15,000 (about £160) to rebuild his shack, and he despaired at where he would find the money with no jobs available since the lockdown. “The lockdown killed my ability to earn my livelihood for my family and forced me to become a virtual beggar dependent on handouts,” he said. “I don’t know why God has been so cruel to me.”

Haldar, it’s not God, it’s an unjust government, not making laws that are needed, and the super rich, who would rather exploit you than pay their fair share.

I have hope though. We don’t need to accept this injustice where the poor are victims of exploitation, and also pay the highest price during disasters. We could make a fair tax structure that would allows us, within a generation, to create a society that provides equal opportunities and protection for all.

To those who think taxing the rich will contract the economy: wealth is not created at the top, but the bottom. Your house was not built by you, but by a few extremely underpaid labourers who lived in your dirt with their family.

To those who think we can keep creating more wealth, without the need for redistribution: wealth is limited because we live on a finite planet. So, we need to redistribute.

As Gandhi said, “The world has enough for everyone’s need, but not for everyone’s greed.”

Featured image credit: Twitter