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Homechevron_rightOpinionchevron_rightEditorialchevron_rightLet the super rich pay...

Let the super rich pay higher taxes


It is no news that the emission from vehicles results in pollution and consequently in global warming.  It is no news either that a jet aircraft will burn in an hour as much fuel as a car would do in a year.   But again there is nothing new but there is rather a paradox in that it was in about 1,700 such private jets that the super rich of the world flew to Davos in Switzerland to attend the World Econmic Forum.    They travelled that far emitting that much  carbon to discuss,  among others,   atmosphere pollution and global warming. 

At least some did point out in Davos how affluence will become so obscene.  And the truth conveyed by the latest Oxfam report is no different.  Not only that a few affluent ones grab a major part of the world's wealth, but this monopolization has been increasing every year too.  The wealth possessed by the 26 richest billionaires of the world,  is equal to the aggregate wealth of 380 crore poor of the world.  The earnings of 2,200 billionaires is at the rate of 90,000 crore dollars per day.   

The rate of growth of their wealth is 12 per cent. On the other hand,  the wealth of the poorest came down by  11 per cent.  One per cent of the assets of the company Amazon, 11,200 crore dollar,  will be sufficient to meet the health bill of Ethiopia with its population of 10 crore.  When global warming is destroying the entire plant,  global economic disparity is destroying mankind.   Oxfam's figures about India too point at rising disparities,   when the assets here of the top one per cent rich increased by 39 per cent.  The poorest 6 crore people are in debt trap since 2004.  The richest in the country,  Mukesh Ambani has an estimated asset of 2.8 lac crore,  while the amount spent in health,  public health,  public sanitation and water distribution sectors together will fall below that, i.e. 2.08 lac crore.    In our country,  the main cause of increase in infant mortality and educational backwardness is economic weakness.  All this means that the change that can be achieved by taking a fraction from the super rich to the public treasury is no small.   And globally,  one percent of the wealth of the affluent will suffice to implement a scheme of educaton for all the world's children and for health protection that can prevent 30 lac deaths.  And also imagine how many could be saved from starvation with half the amount of the 10 lac spent on the wedding of Mukesh Ambani's daughter!

Along with ecological balance,  economic balance is equally important.   In a way, e conomic inequality will hurt the affluent themselves.  According to the report prepared by UN  Development Fund (UNDF),  India is going down in human development index.  A suggestion of UNDF based on statistics, is that if the targeted economic growth has to be achieved,  it is not enough for Gross Domestic Product (GDP) to grow,  but disparities also need to decrease as well.   Even for eradication of poverty,  wealth has to be distributed equitably.   In the last few years,  Chhattisgarh and Bihar recorded GDP growth,  but the level of poverty there did not come down.  At the same time,  although growth was not to the same level,  rate of poverty in Tripura came down,  the reason being that disparity did not increase there.    The trigger for the rise in poverty together with growth in GDP is the rise in disparities,  especially since 2002,  whence wealth has been accumulating among the wealthiest,  according to  some studies.

The proposals put forward by Prof Rutger Bregman,  Dutch author,  are straight forward but effective: stop all theoretical debates at endless conferences,  and focus on just one thing;  the rich should pay reasonable tax. Period.  This suggestion can be justified based on economics too.   When more wealth percolates down to lower strata,  the purchasing power of the poor will go up which in turn will boost the welfare of all,  including the rich.   On the other hand, limiting wealth to a few will depress themselves as much as the larger public.    Unfortunately,  even in India the super rich do not have to pay proportionately high taxes.  Furthermore,   writing off the loans of companies owned by the wealthy is portrayed as development and writing off farmers' loans as reactionary economic policy.   With elections drawing near,  it would be a good idea  if political parties make it clear who all will they will grant tax relief, and the levels of extra tax that they will levy on the top rich brackets.   Thus, let economic environment too improve together with environment.

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