Sam Pitroda’s Controversial Comments on US Inheritance Tax Spark Political Row

Senior Congress leader Sam Pitroda’s remarks on inheritance tax in the United States have ignited a political firestorm, with the BJP accusing the Congress of planning to impose higher taxes and redistribute wealth if they come to power. The controversy has put the spotlight on the sensitive issue of inheritance tax and wealth redistribution in India.

What Did Sam Pitroda Say?

In an interview with ANI, Pitroda talked about the concept of inheritance tax in the US, stating:

“In America, there is an inheritance tax. 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.“

He further added:

“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. I don’t know what the conclusion would be at the end of the day but when we talk about redistributing wealth, we are talking about new policies and new programs that are in the interest of the people and not in the interest of super-rich only.“

BJP’s Reaction and Allegations

The BJP quickly seized on Pitroda’s comments, alleging that it reveals the Congress party’s intention to impose higher taxes and redistribute people’s hard-earned wealth if they come to power.

Prime Minister Narendra Modi claimed that the Congress wants to prevent people from passing on their wealth to their children. BJP spokesperson Jaiveer Shergill tweeted:

“Voting for Congress = Losing your Money + Property + Belongings! Voters be aware, property snatchers are here!“

The BJP continued its attack, with PM Modi saying the Congress’s “dangerous intentions are coming out in the open” and they plan to “loot the living and the dead” through taxes.

Congress’s Response and Clarification

Amid the growing controversy, Pitroda clarified that his comments on US inheritance tax were twisted and taken out of context. He emphasized that he was just stating facts about a US law as an individual and it has nothing to do with Congress party policy in India.

“I mentioned US inheritance tax in the US only as an example in my normal conversation on TV. Can I not mention facts? I said these are the kind of issues people will have to discuss and debate. This has nothing to do with policy of any party including congress” Pitroda said.

The Congress party also distanced itself from Pitroda’s remarks. Party leaders like Jairam Ramesh said Pitroda’s personal views do not always reflect the official position of the Congress.

“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” Ramesh said.

Congress president Mallikarjun Kharge accused the BJP of “playing games” just for “votes” and said the party has no intention of implementing such a policy.

The Congress has no plan whatsoever to introduce an inheritance tax. In fact, Prime Minister Rajiv Gandhi abolished Estate Duty in 1985.

But it is the Modi Sarkar that has wanted to do so!

Fact One: Jayant Sinha, then Minister of State for Finance, publicly stated that he… pic.twitter.com/Qns8UATR48

— Jairam Ramesh (@Jairam_Ramesh) April 24, 2024

Fact Check: Congress’s Actual Position

Despite the BJP’s allegations, the Congress manifesto for the 2024 elections does not mention imposing an inheritance tax or redistributing people’s wealth.

The manifesto does highlight the issue of rising inequality, stating:

“Inequality between the rich on the one hand and the poor and middle classes on the other have increased sharply dealing a body blow to the goals of equality, equity, and social and economic justice.“

It also points out that the share of national income earned by India’s top 1% is at its highest historical levels and among the highest globally, with the rise being particularly pronounced between 2014 and 2023. However, there is no specific proposal for an inheritance tax.

Understanding Inheritance Tax

Inheritance tax, also known as estate tax or death tax, is a levy on the estate of a deceased person before the assets are passed on to their heirs. It is different from income tax and is applied on the total value of assets inherited.

Source: EY Worldwide Estate and Inheritance Tax Guide 2023

In the US, only six states currently have an inheritance tax: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. The tax rates vary by state and can go up to 18%.

Twelve states and the District of Columbia have an estate tax, with rates ranging from 12% to 20%. The federal estate tax ranges from 18% to 40% and applies to estates above $12.92 million for individuals and $25.84 million for married couples (as of 2023).

Conclusion

The controversy over Sam Pitroda’s remarks on US inheritance tax has sparked a heated political debate on wealth redistribution and taxation in India. While the BJP has accused the Congress of planning to impose higher taxes, the Congress has clarified that Pitroda’s views are personal and do not reflect the party’s official position.

As the war of words continues, it is important to have an informed discussion on issues like inequality, taxation, and wealth distribution based on facts and evidence. Sensationalizing comments and tearing them out of context for political gains can distract from the real challenges facing the country.

Ultimately, it is up to policymakers and the public to debate and decide on the best approach to address rising inequality while fostering inclusive economic growth and social justice. Any policy proposals, whether on inheritance tax or wealth redistribution, must be carefully evaluated based on their potential impact and feasibility in the Indian context.