Is an inheritance tax a good idea or a bad idea?
Well, it depends.
What does it depend on?
It depends on whether you are a Congress supporter or a BJP supporter.
What else does it depend on?
It depends on whether you are answering this question in 2024, 2019 or 2014.
What does it not depend on?
Economic analysis.
I have read innumerable tweets/messsages today about the inheritance tax. Or death tax. Or estate tax. These are tweets and messages from economic analysts, politicians, think-tankers, journalists and policy makers.
Every single discussion has been about who has said what about inheritance taxes, and when.
Not a single discussion has been about an economic model that underpins the rationale for or against the inheritance tax.
- What is it about India’s tax buoyancy that justifies (or doesn’t justify) an inheritance tax?
- What about her demography? Does that have a role to play?
- What about the loopholes in the Income Tax Act? Do they have a role to play?
- What about her direct and indirect tax collections?
- What about threshold limits for imposing such a tax?
- How and why have other countries done it? Can we learn from their mistakes? Can we learn from their successes?
- What are the alternatives?
- If we do implement it, do we keep it in perpetuity?
- How much money do we potentially raise if we implement it?
- What might be the downsides?
- How do we judge the quality of implementation if we implement it?
But no, let’s see who said what and when, call each other names, and prove that we are right and they are wrong. That’ll show them. Bloody losers. It’s because of folks like them that India is what it is today.
Do you want to play the game yourself, and show to members of your tribe how you were right and they were wrong? Click on that link, learn how to search on Twitter by date and by handle, and prove how Your Side Alone Speaks The Truth.
If, on the other hand, you are interested in, y’know, actual economic analysis, allow me to recommend Atkinson-Stiglitz and Diamond-Mirrlees, both from the 1970’s. It’s been a while since I’ve read them, and it’s not a topic I’ve ever particularly enjoyed, but I assure you that these are good places to begin.
But Twitter takedowns are faster and more fun, so there’s that.
As for me and what I think, I think that not only was Amit Varma right about the IPL, but if you ask me, he’s right about the harmunia too.
EconForEverybody 