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If the COVID-19 tax on super rich sector of the society in India becomes a truth, what would be the outcome?

As presented suggestions; India’s super-rich population which seems to have the most important liability towards ensuring the public care. But they are going to have a one time COVID-19 relief cess or a wealth tax. At first, the government didn’t have a positive sense regarding this suggestion. Anyhow, due to the ongoing messed up massive economic backdrop, one can have a sense of inability of ruling the situation by allowing the rich sector of the society to bear up a higher tax for a limited period.

COVID-19 has brutally destructed government’s revenue streams except reducing its expenditure. Therefore, the balance between the income and expenditure has broken affecting the economy. Public authorities take quick steps to invent different conventional and unconventional measures to build up public health. Then the government can support the one who needs the help. Some decisions have taken such as improvements in excise duties and imposing a special tax on items such as petroleum products and alcohol.

The present situation can let the government to think of its opinion about FRBM ( Fiscal Responsibility and Budget Management) targets. There was a similar occasion of unexpected economic confusion in 2008 also. In that incident; the federal government of India took steps for fiscal spending to bear up a fiscal deficit around 6% of GDP when the expected deficit was about 2.5%. As proved; the spread and severity of destruction of the economy of the country is more than 2008 nowadays.

International view accepts the tax on the super-rich sector of the society
According to the international view; higher taxes on rich people at sudden needs is a better solution. As an example; during World War 2 super-rich tax rate in the USA rose to over 90% of the normal and it was continued nearly until 20 years. In the time of World War 2; people with higher income in the USA paid income tax as a type of “class tax”. But with World War 2; US Congress changed that tax to a “mass tax”. Most of Americans had to pay it.

In some countries such as Denmark, France, Sweden, Japan, etc. the highest tax rate is higher than 50% even today. High tax on the super-rich sector of the society assists to redistribute the income throughout the society. That may help to fulfill the basic needs of the people with low income and ensure social security.

Tax on the super-rich isn’t a perfect suggestion, but it may become true
There is a possibility of imposing super-rich tax in the coming months without considering the government’s initial tending against accepting a super-rich tax. Really it is an option with shortages. Normally the least number of individuals who get salaries have to bear the additional tax. But as a belief, another group of super-rich people unfairly don’t pay such tax. Not only that; imposing a tax on a selected group of people isn’t fair for them. And also; it goes beyond the principle of reducing the tax rate by widening the tax chain. Since economic liberation in 1991, that mentioned principle is accepted.

Widening of the tax web makes the route to a society full of justice and equality. Anyhow; in a situation like the mass backdrop of the economy faced in nowadays, it isn’t easy to ignore steps such as super-rich tax. And of course such kind of tax should limit for a short period of time.

Super-rich tax is fruitful and uses to assist the redistribution of equity.
The redistributive equity gained by a super-rich tax may be fruitful to the society. To make that money fruitful; that money should reach the people with a lower economy to fulfill their needs. Then a huge number of low economic holders can get support. A large number of small businesses and self employments have stopped due to this lockdown. People engaging in those businesses are a part local economic system. They don’t depend on large suppliers.

Income gain by super-rich tax can’t support the entire economy of the country. But it can help selected procedures which use to build up the economy of the mini finance sector of the society. Then those people don’t want to depend on government support and relief programs. So they can build up their own economy by themselves. Therefore, there may be less fiscal deficit stress for the government

In the end; considering all the facts, there may be both effective and unfair results of imposing super-rich tax to overcome the backdrop of the economy in India. But it is the government’s duty to handle the situation effectively.
If the COVID-19 tax on super rich sector of the society in India becomes a truth, what would be the outcome? If the COVID-19 tax on super rich sector of the society in India becomes a truth, what would be the outcome? Reviewed by ViralBlossom on June 06, 2020 Rating: 5

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